LexM/S. COAL INDIA LIMITED versus COMMISSIONER OF CUSTOMS (PORT), CUSTOMS HOUSE, KOLKATA
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[2025] 5 S.C.R. 1891 : 2025 INSC 609 M/s. Coal India Limited v. Commissioner of Customs (Port), Customs House, Kolkata (Civil Appeal No. 8028 of 2010) 01 May 2025 [Abhay S. Oka and Ujjal Bhuyan,* JJ.] Issue for Consideration Whether the engineering and technical service fees/agency commission/charges paid by the appellant and its subsidiaries to the local agent of the overseas supplier were includable in the assessable value of the imported goods (spare parts) under the Customs Act, 1962, as held by all the lower authorities. Headnotes† Customs Act, 1962 – s.14(1), (1A) – Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 – r.9(1)(a) and (e); Note to r.4 – Assessable value of the imported goods (spare parts), for the purpose of levy of customs duty – Assistant Commissioner of Customs passed order finalizing provisional assessment of bills of entry covering goods imported by the appellant and its subsidiaries under several purchase orders – It held that the engineering and technical service fees (8 percent of the Free on Board (FOB) amount) paid by the appellant and its subsidiaries to the local agent of the overseas supplier, M/s Voltas Limited as reflected in the purchase order were includable in the assessable value of the imported goods (spare parts) u/r.9(1)(a) and r.9(1)(e), 1988 Rules r/w s.14(1)(a), 1962 Act – Since the appellant had failed to include such service fees/agency commission/charges in the assessable value of spare parts so imported resulting in short levy of customs duty amounting to Rs.64,47,244.00, the appellant was directed to pay the same – Order confirmed by Commissioner (Appeals) as also by CESTAT – Challenge to – Interference, if warranted: * Author 1892 [2025] 5 S.C.R. Supreme Court Reports Held: No – View taken by all the lower authorities is correct – CESTAT carefully analysed the relevant documents and held that the services rendered were such that appellant faced no inconvenience at the time of importation – Amounts paid to Voltas Limited by the appellant were not linked to any services specifically rendered by it – Payments were made only in connection with the sale of the goods presumably because M/s Voltas Limited was an agent of the foreign supplier – Thus, payments made to M/s Voltas Limited were only as a condition of sale and not for any services rendered – Therefore, it had a direct nexus to the value of the goods imported – Services rendered by the Indian agent were not post-importation activities – The services provided were directly relatable to the import of the goods by way of product support service covered by ss.14(1) and 14(1A), Customs Act r/w r.9(1)(e), Customs Valuation Rules. [Paras 25.1, 33, 34] Customs Act, 1962 – s.14 – Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 – Note to r.4; r.12 – Plea of the appellant that note to r.4 has statutory force and it stipulates that value of imported goods shall not include charges for maintenance or technical assistance undertaken after importation of imported goods: Held: This Court in J.K. Corporation Limited adverting to Note to r.4 held that what would be excluded for computing the assessable value for the purpose of levy of customs duty is any amount paid for post-importation activities including any amount paid for post- importation technical assistance. [Para 31] Case Law Cited Commissioner of Customs (Ports), Kolkata v. J.K. Corpn. Ltd. [2007] 2 SCR 196 : (2007) 9 SCC 401; Commissioner of Customs v. Ferodo India (P) Ltd. [2008] 3 SCR 147 : (2008) 4 SCC 563 – relied on. Collector of Customs (Preventive), Ahmedabad v. Essar Gujarat Ltd., Surat [1996] Supp. 8 SCR 757 : (1997) 9 SCC 738; Tata Iron & Steel Co. Ltd. v. Commissioner of Central Excise & Customs, Bhubaneswar [2000] 1 SCR 876 : (2000) 3 SCC 472 – referred to. [2025] 5 S.C.R. 1893 M/s. Coal India Limited v. Commissioner of Customs (Port), Customs House, Kolkata List of Acts Customs Valuation (Determination of Price of Imported Goods) Rules, 1988; Customs Act, 1962; Customs Tariff Act, 1975; General Clauses Act, 1897. List of Keywords Customs duty; Engineering and technical service fees; Direct nexus to the value of the goods imported; Engineering and technical service fees includable in the assessable value of imported goods; Assessable value of the imported goods (spare parts); Service fees; Agency commission; Agency charges in the assessable va
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