- (1.) The Revenue is in appeal before us aggrieved by and dissatisfied with the judgement and final order dated 15th May, 2006, passed by the Customs Excise and Service Tax Appellate Tribunal, Kolkata, in Appeal No.C-259 of 2002. The fact of the matter is not in dispute. M/s. Orissa Synthetics Limited is a division of the respondent herein. It, being desirous of undertaking manufacture of Polyester Oriented Yarn and Flat Yarn, entered into a collaboration agreement with M/s. Samsung Company Limited and M/s. Chiel Synthetics Inc., both of Korea, on 18th November, 1999. M/s. Cheil Synthetics Inc. is said to be an associate company of M/s. Samsung group under the laws of Republic of Korea. The said Agreement is in two parts; Part-A provides for licence, knowhow and technology, while Part-B provides for supply of equipment as a part of necessary plant and machinery and equipment for manufacture of polyester oriented yarn. Part-A stipulates lumpsum payment of US $14, 00, 000 by the respondent to the said companies for supply of licence, knowhow and technology. Under Part-B of the said Agreement, however, price of foreign equipments are said to be US $34, 86, 000.00 + DM 12, 00, 000.00 + J. Yen 88, 50, 00, 000.00.
(2.) Pursuant to and in furtherance of the said collaboration Agreement, the respondent herein had imported plant and machinery manufactured by the said companies. The Assistant Commissioner of Customs, Special Valuation Branch, in its order dated 28th May, 1999, opined that the amount of consideration mentioned in both parts of the Agreement should be added together, having regard to the fact that the same forms part of an integrated contract, the value of knowhow estimated at US $ 40, 00, 000.00 must be added to the value of the equipment, on the premise that payment thereof was a pre-condition for sale of the equipments under Part-B. An appeal was preferred thereagainst by the respondent before the Commissioner of Customs. The appellate authority, by reason of its order dated 31st May, 2000, dismissed the said appeal. However, the Customs Excise and Service Tax Appellate Tribunal [CESTAT], on a further appeal preferred by the respondent, allowed the same and remitted the matter to the authority below for a de novo decision in the light of a decision of this Court in Tata Iron and Steel Company Limited vs. Commissioner of Central Excise and Customs Bhubaneswar, Orissa 2000 Indlaw SC 671. The Deputy Commissioner of Customs, however, held that the decision of this Court in TISCO (supra) is distinguishable stating that both parts of the Agreement, Part-A and Part-B, are complimentary to each other and one part thereof cannot be implemented without complying with the conditions of the other part of the Agreement. The original authority, therefore, upheld its earlier order. The Commissioner of Customs, however, in the appeal preferred by the respondent herein, set aside the said order dated 24th June, 2002, holding that the decision of this Court in TISCO (supra) is squarely applicable to the facts of the case and that Collector of Customs (Prev.), Ahmedabad vs. Essar Gujarat Limited 1996 Indlaw SC 1896 (S.C.)] is not applicable. The Tribunal dismissed the appeal preferred thereagainst by the Revenue.
(3.) Mr. K. Radhakrishnan, learned senior counsel appearing on behalf of the Appellant, would take us through various clauses of the said Memorandum of Understanding dated 18th November, 1999, entered into by and between M/s. Orissa Synthetics Limited and M/s. Samsung Company Limited and submit that supply of technical knowhow and purchase of licence and supply of equipments was a condition of sale. According to the learned counsel, as the conditions laid down in both parts of the said Agreement are complimentary to each other, Part-B cannot exist without Part-A thereof. Our attention in this behalf has been drawn to Rule 9(1)(e) of the Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988 (for short the Rules] to submit that the same is a broadbased one.;