Justice Abhay S. Oka, Justice Ujjal Bhuyan, Supreme Court
Services Provided Were Directly Relatable To Import Of Goods: Supreme Court Dismisses Appeal Of Coal India Ltd. In Customs Case
|The Supreme Court dismissed the Appeal filed under Section 130E of the Customs Act, 1962 against the CESTAT's Order.
The Supreme Court dismissed the Civil Appeal of the M/s. Coal India Limited (CIL) in a customs case.
The Appeal before the Court was filed under Section 130E of the Customs Act, 1962 against the Order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata.
The two-Judge Bench of Justice Abhay S. Oka and Justice Ujjal Bhuyan said, “… we find that the 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 which is covered by Sections 14(1) and 14(1A) of the Customs Act read with Rule 9(1)(e) of the Customs Valuation Rules.”
AOR Rahul Kaushik represented the Appellant while AOR Arvind Kumar Sharma represented the Respondent.
Factual Background
CIL (Appellant) is a Government of India undertaking that has subsidiaries in the country. In 2000, Central Coalfields Limited (CCL), which is the Appellant’s subsidiary, had invited sealed tenders for supply of spare parts for P&H Shovel. M/s. Harnischfeger Corporation, USA submitted its quotations through its distributor M/s. Voltas Limited. Voltas submitted detailed quotation on behalf of its principal Harnischfeger Corporation (foreign supplier). Foreign supplier supplied the spares which were received by the Appellant on provisional assessment of bills of entry made by the customs authority. Thereafter, the Assistant Commissioner (AC) of Customs passed an Order finalizing provisional assessment of bills of entry covering goods imported by the Appellant and its subsidiaries under several purchase orders/contracts.
Since the Appellant failed to include service fees/agency commission/charges in the assessable value of spare parts so imported, this resulted in short levy of customs duty. Therefore, AC directed the Appellant to pay Rs. 64,47,244/- within 15 days and being aggrieved, the Appellant filed an Appeal before the Commissioner of Customs, which held that the case is squarely covered under Rule 9(1)(a) and Rule 9(1)(e) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (Customs Valuation Rules). This was challenged before the CESTAT, which held that the payment made to Voltas Limited had a direct nexus to the value of goods imported. Hence, the Appellant approached the Apex Court.
Reasoning
The Supreme Court after hearing the contentions of the counsel, observed, “Note to Rule 4 has been explained by this Court in J.K. Corporation Limited (supra). This Court after adverting to the relevant portion of the Note to Rule 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."
The Court, therefore, was of the opinion that the view taken by all the lower authorities is correct and no interference is warranted and hence, there is no merit in the Appeal.
Accordingly, the Apex Court dismissed the Appeal.
Cause Title- M/s. Coal India Limited v. Commissioner of Customs (Port), Customs House, Kolkata (Neutral Citation: 2025 INSC 609)
Appearance:
Appellant: AORs Rahul Kaushik, Bhuvneshwari Pathak, Advocates Shilpi Satyapriya Satyam, Satyavir Singh Rana, and Dhanesh Kumar.
Respondent: AORs Arvind Kumar Sharma, Mukesh Kumar Maroria, Advocates V C Bharathi, Mayank Pandey, Mukul Singh, and Prashant Singh Ii.