D.P.Wadhwda - (1.) STATE Bank of India (SBI) is aggrieved by the order dated 29/09/1995 of the Customs, Excise and Gold (Control) Appellate tribunal (for short, the 'Tribunal') rejecting its claim for refund of custom duty amounting to Rs. 10,86,49,119.00. The claim for refund has been made under Section 27 of the Customs Act, 1962 and it is alleged that the excess amount of custom duty could not have been levied in view of the provisions of the Customs Valuation (Determination of Price of Imported Goods) Rules, V. 88 "(for short, the 'Rules') framed thereunder and the Press Note dated 17/03/1992 of the Department of Electronics, government of India.
(2.) . SBI imported a consignment of Computer Software and Manuals from Kindle Software Ltd., Dublin, re-land ('Kindle' for short) of the value of US $ 4,084,475.00 (equivalent to Rs. 10,75,70,267.25). SBI filed a Bill of Entry No. 5209 dated 19/07/1991 along with the invoice of Kindle bearing No. 910701 dated 3/07/1991 for the aforesaid amount and after paying custom duty of Rs. 12,04,78,699.00 on 25/07/1991 cleared the goods for home consumption. On 7/08/1991 SBI filed an application before the Additional Collector of Customs, Bombay claiming refund of custom duty of Rs. 10,86,49,119.00 -. It said that it had since received a detailed invoice which gave the particulars of imported Software and Manuals as under: JUDGEMENT_72_SCALE1_2000Html1.htm . SBI, therefore, said that though it had paid custom duty on the total value shown in the Bill of Entry, the basic cost of software which was to be installed at one site in Bombay was US $401,047 while the rest of the amount of US $3,683,428 was payable only as licence fees for its right to use the software for the bank country-wide. SBI, therefore, said that it was required to pay custom duty for the consignment of software on an amount of US $ 401,047 only which included the cost of Manuals, Diskettes and licence fee and not on the whole amount shown in the Bill of Entry. In support of its claim SBI referred to the relevant Rules, these being Rules 2, 3, 4, 9(1) (c) and 12 of the Rules and the Interpretative Note to Rule 9(1)(c) : On the strength of the interpretative Note to Rule 9( 1 )(c) the SBI said that charges for the right to reproduce the imported goods in the country of importation should not have added to the price actually paid or payable for the imported goods in determining the custom value. SBI, therefore, requested that assessment made in respect of the consignment imported by it be rectified and that the breakup of the invoice amount in respect of (1) the cost of the manuals and diskettes, single site licence fee and (2) countrywide licence fee shown on the Bill of Entry earlier at the time of clearance of the goods. With this application SBI also sent a copy of another invoice from Kindle bearing the same number and date and for the same amount-of US $ 4,084,475.00, now bifurcating the amount. We may set out here both the invoices, one that filed with the Bill of Entry and the other with the application seeking refund of the custom duty. "invoice STATE BANK OF INDIA, CENTRAL OFFICE, NEW ADMINISTRATIVE BUILDING, MADAME CAMA ROAD, BOMBAY 400 021, INDIA. JUDGEMENT_72_SCALE1_2000Html2.htm JUDGEMENT_72_SCALE1_2000Html3.htm "Invoice STATE BANK OF INDIA, CENTRAL OFFICE, NEW ADMINISTRATIVE BUILDING, MADAME CAMA ROAD, BOMBAY 400 021, INDIA. JUDGEMENT_72_SCALE1_2000Html4.htm JUDGEMENT_72_SCALE1_2000Html5.htm . SBI stated that it corresponded with Kindle and thereafter received the second invoice showing the breakup of the single site fee and the country-wide licence fee for use by copying and on that basis filed its claim for refund of the excess amount of custom duty amounting to Rs. 10,86,49,119.00.
(3.) . By order dated 29/02/1992, the Assistant Collector rejected the refund claim of the SBI. It filed an appeal before the Collector (Appeals). In the meantime a press note : dated 17/03/1992 was issued by the government of India in the Department of Electronics which, according to SBI, directed that custom duty was not to be levied on reproduction charges. By order dated 12/10/1992, Collector (appeals) remanded the matter back to the Assistant Collector with the following observations : "I find that Assistant Collector has not given any reason why the countrywide use of software cannot be considered as reproduction in the present case and also why the licence fee for countrywide use should not be considered the charges for the right to reproduce the imported goods in the country of importation as mentioned in Note to Rule 9(1)(c)of the Customs Valuation Rules, 1988. This is perhaps the most vital question in the case which has to be decided after due enquiry and the finding has to be a properly reasoned one. That is missing in the impugned order. The press note No. CDD/Misc/92 dated 17.3.92 issued by the Department of Electronics has also been produced before me which was not available to the Lower Authority when he passed the impugned order in February 1992. This merits due consideration. In view of the above, I quash the impugned order and direct the Asstt. Collector to reexamine the case afresh and decide the issue." . Now again after examining the matter in detail and after giving personal hearing to the SBI, the Assistant Collector by his order dated 21/06/1993 dismissed the claim of the SBI for refund. Appeal was taken to the Collector (Appeals) who by order dated 7/07/1994 upheld the order of the Assistant Collector. Further appeal was taken to the Tribunal which, by the impugned judgment dated 29/09/1995, dismissed the same. That is how the matter is before us.;