COMMISSIONER OF CUSTOMS (PORT) KOLKATA vs. M/S. STEEL AUTHORITY OF INDIA LTD

C.A. No.-006398-006398 - 2009Supreme Court2020 INSC 36727 April 2020Bench: HON'BLE MR. JUSTICE ANIRUDDHA BOSE41 pages
For Petitioner: B. KRISHNA PRASADFor Respondent: YASHRAJ SINGH DEORA
AI SummaryDismissed

What did the Supreme Court hold?

The Tribunal held that the disputed items related to post-importation activities and were not conditions for the sale of imported equipment. Therefore, their value could not be added to the assessable value.

What were the facts?

The dispute concerns the valuation of imported plant and equipment by SAIL for modernization. Customs authorities sought to add the cost of basic design, engineering, and supervision charges to the invoice value, treating the contracts as turnkey projects.

What were the issues?

Whether post-importation design, engineering, and supervision charges can be added to the assessable value of imported goods under the Customs Valuation Rules, especially when the contract is structured as a turnkey project.

Which sections of the Income-tax Act were involved?

Customs Act, 1962, Customs Valuation (Determination of Price of Imported Goods Valuation Rules, 1988) Rule 4, Rule 9(1)(e)

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Cause title — parties, addresses and appearances
1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6398 OF 2009 COMMISSIONER OF CUSTOMS (PORT) KOLKATA ...APPELLANT VERSUS M/S STEEL AUTHORITY OF INDIA LTD. ...RESPONDENTS

J U D G M E N T

ANIRUDDHA BOSE, J.

The dispute in this appeal relates to valuation under the Customs Act, 1962 of import of certain items made by the respondent Steel Authority of India Ltd. (SAIL) under two contracts, bearing nos. PUR/PC/MOD/08.01/Pt.II dated 31.10.1989 and PUR/PC/MOD/08.01/Pt-I dated 29th March 1990. These imports were made in connection with modernisation, expansion and modification

2

for their plant at Durgapur in West Bengal. For this purpose, SAIL had floated seven Global Tender Contract Packages. The two contracts were part of these Tender Contract Packages. They were registered with the customs authorities for the purpose of project import benefits in terms of the 1962 Act. The first contract involved in this appeal was with a consortium consisting of a German Company, Hoestemberghe & Kluisch, GMBH and H & K Rolling Mills Engineering Private Limited,

The order continues below.

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