INDUSIND MEDIA & COMMUNICATIONS LTD versus COMMISSIONER OF CUSTOMS, NEW DELHI on 27 September 2019

1. This Appeal under Section 130E of the Customs Act, 1962(hereinafter referred to as ‘the Act’) arises out of Order No.C/A/57743/2017 dated 09.11.2017 passed by the Customs Excise and Service TaxAppellate Tribunal (for short, ‘the Tribunal’) dismissing Appeal No.C/51770 of 2016 preferred by the appellant herein.

2. The basic facts leading to the issuance of Show Cause Noticedated 27.06.2014 initiating proceedings against the appellant, as set outin the Order under appeal are as under:- “The appellant imported certain goods at air cargo complex, NewDelhi and filed Bill of Entry 2660085 dated 26.6.2003. Theydeclared the goods as Multiplexor Satellite Receivers, test andmeasurement equipment etc. and attached six invoices covering19 items imported. They indicated individual classification for thevarious items under Chapter 84/85 of the Customs Tariff. TheBill of Entry was assessed as per declaration and applicablecustoms duty was paid. Subsequently, information was receivedfrom SIIB Air Cargo Complex Mumbai, that investigations hadbeen commenced against the appellant for import of similar goodsat Mumbai. Accordingly, Provisional Assessment was beenordered under Section 18 of the Customs Act.

2. The investigation undertaken at Mumbai revealed as follows:- The importer had placed the order at UK for purchase ofequipments – one set for Mumbai and another set for Delhi. Each

A

B

C

D

E

FG

H

A

B

C

D

E

F

G

H

SUPREME COURT REPORTS

set of equipment, taken together constituted ‘Head End’ for cableTV operations. The ‘Head End’ was an equipment at a local TVoffice that originates the cable TV services and cable TV modemservices to subscriber though Conditional Access System (CAS).All imported equipments taken together contributes towards aclearly refined function i.e. ‘Head End’ for cable TV operations.The complete set of equipment together merits classificationunder Customs Tariff Heading (CTH) 8543 8999, in the light ofNote 4 to Section XVI. Thus, it appeared that individualclassification indicated for 19 imported items amounts tomis-declaration. The search operation carried by SIIB, ACC,Mumbai at the premises of importer further revealed that theimporter had also mis-declared the value of the importedconsignments at Delhi and Mumbai. They had suppressed thevalue of embedded software as well as value of services payableto the foreign supplier for carrying out integration of the systemprior to shipment and provide complete commission andinstallation services at the customers premises. Further, it wasnoticed that the purchase order placed by the importer wasrevised to show as CIF instead of FOB.”

3. In the aforesaid circumstances, Show Cause Notice dated27.06.2014 was issued by the Department stating inter alia :- “18. In view of the above, it appears that the Importer hadfabricated documents by way of splitting of value of the goodsand declared lesser value to the Customs Department with thesole intention to evade payment of Customs Duties. Therefore, itappeared that the Importer had intentionally not declared the trueand correct value of the goods imported to the customs for thepurpose of payment of Customs Duty. Further the cost ofservices was to be paid separately by the Importer to theirsupplier. Hence, the Importer failed to make true declarations.Therefore, the goods imported vide Bill of Entry No.260085 dated26.06.2003 filed at Air Cargo Complex, New Delhi also appear tobe liable for confiscation under Section 111(m) of the CustomsAct, 1962 due to their aforesaid act of omission and commission.It also appears that they have rendered themselves liable forpenal action under Section 112(a) and/or Section 114AA of theCustoms Act, 1962.”

INDUSIND MEDIA & COMMUNICATIONS LTD.v. COMMR.

OF CUSTOMS, NEW DELHI [UDAY UMESH LALIT, J.]

The appellant was thus asked to show cause why:

(a) the declared values should not be rejected under Rule 10A ofthe erstwhile Customs Valuation (Determination of Price ofImported Goods) Rules, 1988 and the same should not beredetermined under Rule 9(1)(e) (adding cost of services) ofthe erstwhile Custom Valuation (Determination of Price of Im-ported Goods) Rules, 1988; (b) the invoice value of imported goods declared in the (Bill ofEntry as Rs.1,02,91,463/- should not be enhanced toRs.1,72,03,243/- (Rupees One Crore Seventy Two Lakhs ThreeThousand Two Hundred and Forty Three Only) for the purposeof assessment under Section 14 of the Customs Act, 1962 readwith Rule 9(1)(e) of the erstwhile Customs Valuation(Determination of Price of Imported Goods) Rules, 1988 andthe provisional assessment made under Section 18 of CustomsAct, 1962 should not be finalised accordingly.

4. According to the record, the appellant was given severalopportunities but no written submissions, in response to the Show CauseNotice, were filed. The facts on record also disclose that theopportunity of personal hearing was also extended and the matter wasadjourned from time to time but the appellant did not avail theopportunity of personal hearing[1]. After considering the facts on record,the Principal Commissioner of Customs (Import) by his order dated29.12.2015 rejected the declaration by the appellant vide Bill of EntryNo. 260085 dated 26.06.2003. It was observed that the appellant hadintentionally not declared the true and correct value and correctclassification of imported goods. The conclusion was drawn as under:- “26. … …I find that in the instant case, the Noticee(s) made adeclaration at the time of filing of Bill of Entry that goodsimported by them vide Bill of Entry No. 260085 dated 26.06.2003were different parts classifiable under different CTHs whereasthe goods under import were the complete equipment ofhead-end classifiable under CTH 85438999 and the goods werealso declared undervalued, as discussed above. Brigadier RDeshpande (Retd.), Vice President, Technical of the importer hadadmitted his awareness in his statement dated 10.07.2003 that 1Paras 16 and 17 of the Order dated 29.12.2015

A

B

C

D

EF

G

Asoftware was embedded in the machine. He in connivance withthe supplier of goods fabricated document by splitting the valuesbetween the goods imported and the other services rendered bythe supplier in connection with the imported goods and as such, Ifind that the declaration of the Noticee(s) was false in materialparticular. In view of above, I hold both the Noticee(s) are liableBto penalty under Section 114AA of the Customs Act, 1962.”

A

The Principal Commissioner of Customs (Import) then redeter-mined the value of all the goods imported under said Bill of Entry asunder:- “(a)… …The value of all the goods imported under the said B/Etaken together is redetermined under Rule 9(1)(e) of the said Rulesas US $ 361633 CIF and consequently after loading 1% towardslanding charges and applying the relevant exchange rate, theassessable value is determined as Rs.1,72,03,243/-(Rupees OneCrore Seventy Two Lakhs Three Thousand Two Hundred andForty Three Only) for the purpose of Section 14 of the CustomsAct, 1962 read with Rule 9(1)(e) of the Customs Valuation(Determination of Price of Imported Goods), Rules, 1988.

C

D

(b) The classification of all the components imported under theB/E No.260085 dated 26.06.2003 taken together is determinedunder CTH 85438999 of the Customs Tariff Act, 1975.

E

(c) The provisional assessment made in respect of B/E No.260085dated 26.06.2003 is finalized under Section 18 of the CustomsAct, on the basis of revised assessable value and classification asordered above. Consequently, demand for differential dutyamounting to Rs.54,19,475/- is confirmed. I order that the amountof Rs.54,19,475/- deposited at the time provisional release of thegoods be appropriated towards the differential duty.

F

(d) The goods imported under B/E No.260085 dated 26.06.2003,which were provisionally released on execution of P.O. bond forRs.1,72,03,242/-, are confiscated under Section 111(m) of theCustoms Act, 1962. Since the goods are already released to theparty, they are ordered to pay redemption fine of Rs.10,00,000/-(Rupees Ten Lakhs only) under Section 125 of the Customs Act,1962 in lieu of confiscation thereof.”

G

The Order dated 29.12.2015 proceeded to impose penalty asunder:- “(e) I impose a penalty of Rs.15,00,000/- (Rupees Fifteen Lakhsonly) on M/s. Indusind Media & Communication Ltd., Mumbaiunder Section 112(a) of the Customs Act, 1962.

(f) I impose penalty of Rs.15,00,000/- (Rupees Fifteen Lakhs only)on M/s. Indusind Media & Communication Ltd., Mumbai underSection 114AA of the Customs Act, 1962.

(g) I impose a penalty of Rs.3,00,000/- (Rupees Three Lakhsonly) on Brigadier R. Deshpande (Retd.), Vice President, Technicalof M/s. Indusind Media & Communication Ltd., Mumbai underSection 112(a) of the Customs Act, 1962.

(h) I impose a penalty of Rs.2,00,000/- (Rupees Two Lakhs only)on Brigadier R. Deshpande (Retd.), Vice President, Technical ofM/s. Indusind Media & Communication Ltd., Mumbai underSection 114AA of the Customs Act, 1962.

(i) The redemption fine and penalties may be recovered by en-forcing the Bank Guarantee executed at the time of provisionalrelease of goods.”

5. The appellant, being aggrieved, filed Customs AppealNos.51769-51770 of 2016 before the Tribunal. It was submitted thatthere was no undervaluation of the goods; that the department hadincorrectly included the amount towards software and post importservices; and that Note 4 to Section XVI of the First Schedule to CustomsTariff Act, 1975 (“the Act’, for short) had no application in the matter. Itwas alternatively submitted that the goods in question meritedclassification under Central Excise Tariff Heading (CETH) 8525 2019as “transmission apparatus” and not under 8543 as contended by theDepartment. In response, it was submitted on behalf of the Departmentthat out of 19 items indicated in the Bill of Entry, only 8 items werephysically presented, as several cards were already assembled in themain unit; that the appellant had not given proper description in the Billof Entry and the goods imported were complete ‘Head End’ and notparts; that the charges covered by the relevant invoice amounting to US$ 1,00,019 were rightly included since they pertained to charges wherethe software covered by the invoice was already embedded in theequipment and that the goods were rightly classified under 8543.

A

B

C

D

EF

G

H

A6. After hearing rival submissions, following issues were framedby the Tribunal for consideration:- “1. First is the classification of the imported goods – whether8543 as ordered by the adjudicated authority or 8525 as claimedby the appellant.

B

2. Second issue is of valuation – whether the value of softwarealready embedded in the equipment as well as service chargesare required to be included in the assessable value.”

7. The Tribunal relied upon Note 4 to Section XVI and found thatthough different equipments were ordered, they were meant to beCinterconnected in such a way as to perform a common clearly definedfunction which was to be ‘Head End’. However, according to theTribunal, the goods would actually be covered by heading 8525 and notby heading 8543. For arriving at such conclusion, reliance was placedon the decisions in SET India Pvt. Ltd. vs. Commissioner ofDCustoms, Cochin[2]and Commissioner of Customs vs. Multi ScreenMedia Private Limited[3].

While considering the issue regarding valuation, the purchaseorder was relied upon, according to which, apart from supply ofequipment, necessary software had to be embedded in the equipmentEbefore the supply was effected. Relying on Sub-Rule (iii) of Rule 10 ofthe Customs Valuation (Determination of Value of Imported Goods) Rules,2007 (for short, ‘the 2007 Rules’) it was observed that since thesoftware was already incorporated in the imported goods, the value ofthe same was required to be added to the transaction value.

It was concluded:-F

“19. In view of the mis-declaration established in respect ofvaluation, the imported goods will be liable for confiscation undersection 111 of the Customs Act and the appellant will also beliable for penalty.”

GIn the premises, by Order under appeal, the matter was remandedto the adjudicating authority only for the purpose of recomputing thedifferential duty in the light of its conclusion that the classification of H

2 2003 (152) ELT 190 (Tribunal – Mumbai)3 2015 (322) ELT 421 (SC) = (2015) 16 SCC 263

INDUSIND MEDIA & COMMUNICATIONS LTD.v. COMMR.OF CUSTOMS, NEW DELHI [UDAY UMESH LALIT, J.]

imported goods was to be under heading 8525 and not under heading8543.

A

8. In this appeal, it has principally been submitted:- “A. The Imported Goods have been correctly classified by theAppellant.

B

a. The following major components were imported by theAppellant from Tandberg:

1. Multiplexers

2. Satellite receivers

C

3. Test and measurement

b. The following are the major components imported from othersupplier by the Appellant:

i. CAM Modules – Aston and Nagravision

D

ii. Encoders

iii Power Vu receivers – Scientific Atlanta iv Integrated receiver De-coder’s (IRD’s) – Purchasedfrom the channels directly E

v. Encryption System -Nagravision

c. The Head End is the physical location in your area where thetelevision signal is received by the provider, stored, processedand transmitted to their local customers (subscribters).

d. Undisputedly the Appellant being a Multi System OperatorF(“MSO”) i.e. a cable network operator, receives encoded andscrambled signals from Network Broadcasters. The majorfunction of a Head End is to decode and unscramble, theencoded and scrambled signals received from the Broadcast-ers. Such function admittedly could not be achieved withoutEncoders, IRD’s, Power Vu Receivers and EncryptionGSystem which were imported by the Appellant from othersuppliers.

e. Without these equipments working in conjunction network, theencoded and scrambled signals from Broadcasters could not H

Abe received at the Head End (“Power Vu Receivers”) andneither can they be decoded (Encoders and IRD’s) orunscrambled (“Encryption System”) and thereafter could notbe broadcasted to the recipient/subscribers. Therefore, theintended function of a Head End could not be achievedwithout Encoders, IRD’s, Power Vu Receivers andBEncryption System. These equipments admittedly were not partof the imported consignment under dispute. Admittedly theseequipment’s were imported separately from other suppliers.

f. Therefore, it can be concluded that the imported consignmentdoes not constitute a complete Head End and that eachCcomponent is to be classified under the relevant ChapterHeading.”

and following principal question has been raised:- “A. Whether the CESTAT has erred in failing to consider theDprimary submission of the Appellant, that the 19 different itemsimported by the Appellant under the Bill of Entry No.2660085dated 26.06.2003 (‘BOE’) even if taken together do not formone co posite ‘Head-end’ and that each item has an individualfunction, and each item is to be classified under the ChapterHeading it falls mainly CTH 85175010, CTH 85281299, CTHE85438910, CTH 84717010 and CTH 85249112.”

9. Appearing in support of the appeal, Mr. Tarun Gulati, learnedSenior Advocate, also submitted:-a) The imports and Bill of Entry in the instant case were of theFyear 2003 and 2007 Rules would not apply.

b) Certain activities like engaging the services for appropriatesoftware etc. as a result of which cards were embedded initems of import, were essentially post import activities andcould not be taken into account for the purposes of valuation.G10. Mr. Aman Lekhi, learned Additional Solicitor Generalappearing for the respondent refuted all the contentions of the appellantand submitted that:-

a) Though the invoices in the case did mention individual items, thedominant intent had to be seen whether the intended userH

INDUSIND MEDIA & COMMUNICATIONS LTD.v. COMMR.OF CUSTOMS, NEW DELHI [UDAY UMESH LALIT, J.]

was of individual items or they were supposed to be usedcollectively as part of one apparatus, in which event Note 4 toSection XVI would provide guidance.

A

b) Rule 9 of the Customs Valuation (Determination of Price ofImported Goods) Rule, 1988 (“the 1988 Rules”, for short)being almost identical to Rule 10 of 2007 Rules, the reliancewas not misplaced.

B

c) In any case, Rule 10 of 2007 Rules which seeks to explaincertain matters is clarificatory in nature and the meaning wouldbe consistent with Rule 9 of 1988 Rules.

C

d) The submission that there were post import charges which weregetting included in the valuation was incorrect and what wasfound as a fact was that all those software cards wereembedded in various parts when the import had taken place.

11. It must be stated that the finding of the Tribunal that the im-ported goods would be classifiable under Tariff Item 8525 and not under8543, has not been challenged by the respondent. Thus, insofar as issueof classification is concerned, the question is whether the items importedought to be considered individually or whether the treatment given bythe Department, with the aid of Note 4 to Section XVI was correct.Note 4 appears in Section XVI of the First Schedule to the Act. SaidSection XVI has the heading:- D

E

“Section XVI- Machinery and mechanical appliances; electricalequipment; parts thereof; sound records and reproducers, televisionimage and sound recorders and reproducers; and parts andaccessories of such articles”

F

Note 4 of Said Section XVI is to the following effect:- “4. Where a machine (including a combination of machines)consists of individual components (whether separate orinterconnected by piping, by transmission devices, by electric cablesor by other devices) intended to contribute together to a clearlyGdefined function covered by one of the headings in Chapter 84 orChapter 85, then the whole falls to be classified in the headingappropriate to that function.”

H

ATariff Item 8525 appearing in Chapter 85 is as under:- “Transmission apparatus for radio telephony, radio-telegraphy,radio-broadcasting or television, whether or not incorporatingreception apparatus or sound recording or reproducingapparatus; television, cameras; still image video cameras and otherBvideo camera recorders; digital cameras.”

12. The Appellant is right in its submission that since the Bill ofEntry in the present case was of the year 2003, 2007 Rules would notapply and that the appropriate Rules would be 1988 Rules. Rule 9 of1988 Rules was set out by this Court in Commissioner of CustomsC(Port), Chennai v. Toyota Kirloskar Motors P. Ltd.[4], while consideringthe issue whether technical assistance fees in terms of Article 4 of theAgreement between the parties had any direct nexus with importationof goods. It was observed:- “25. The Central Government in exercise of its power conferredDupon it under Section 156 of the Act, made rules known as “theCustoms Valuation (Determination of Price of Imported Goods)Rules, 1988”. Rule 3 provides for determination of the method ofvaluation, stating:

“3. Determination of the method of valuation.—For theEpurpose of these Rules,—

(i) the value of imported goods shall be the transaction value;

(ii) if the value cannot be determined under the provisions ofclause (i) above, the value shall be determined by proceedingsequentially through Rules 5 to 8 of these Rules.”

F

26. How the transaction value would be determined has been laiddown in Rule 4 of the Rules, stating that the same shall be theprice actually paid or payable for the goods when sold for exportto India adjusted in accordance with the provisions of Rule 9 ofthe said Rules. Rule 9 of the Rules provides for determination ofGtransaction value, stating:

“9. Cost and services.—(1) In determining the transactionvalue, there shall be added to the price actually paid or payablefor the imported goods,—

42007 (213) ELT 4 (SC) = (2007) 5 SCC 371H

(a) the following cost and services, to the extent they areincurred by the buyer but are not included in the price actuallypaid or payable for the imported goods, namely—

(i) commissions and brokerage, except buying commissions;

(ii) the cost of containers which are treated as being one forcustoms purposes with the goods in question;

(iii) the cost of packing whether for labour or materials; (b) the value, apportioned as appropriate, of the following goodsand services where supplied directly or indirectly by the buyerfree of charge or at reduced cost for use in connection withthe production and sale for export of imported goods, to theextent that such value has not been included in the price actuallypaid or payable, namely—

(i) materials, components, parts and similar items incorporatedin the imported goods;

(ii) tools, dies, moulds and similar items used in the productionof the imported goods;

(iii) materials consumed in the production of the importedgoods;

(iv) engineering, development, art work, design work, andplans and sketches undertaken elsewhere than in India andnecessary for the production of the imported goods;

(c) royalties and licence fees related to the imported goods thatthe buyer is required to pay, directly or indirectly, as a condition ofthe sale of the goods being valued, to the extent that such royaltiesand fees are not included in the price actually paid or payable; (d) the value of any part of the proceeds of any subsequent resale,disposal or use of the imported goods that accrues, directly orindirectly, to the seller; (e) all other payments actually made or to be made as a conditionof sale of the imported goods, by the buyer to the seller, or by thebuyer to a third party to satisfy an obligation of the seller to theextent that such payments are not included in the price actuallypaid or payable.”

A

B

C

D

E

F

G

H

A27. The issue before us is no longer res integra in view of thedecision of this Court in Commr. of Customs (Port) v. J.K. Corpn.Ltd.wherein it is stated: (SCC para 9)

“9. The basic principle of levy of customs duty, in view of theaforementioned provisions, is that the value of the importedBgoods has to be determined at the time and place of importation.The value to be determined for the imported goods would bethe payment required to be made as a condition of sale.Assessment of customs duty must have a direct nexus withthe value of goods which was payable at the time of importation.If any amount is to be paid after the importation of the goods isCcomplete, inter alia, by way of transfer of licence or technicalknow-how for the purpose of setting up of a plant from themachinery imported or running thereof, the same would not becomputed for the said purpose. Any amount paid for post-importation service or activity, would not, therefore, come withinDthe purview of determination of assessable value of the importedgoods so as to enable the authorities to levy customs duty orotherwise. The Rules have been framed for the purpose ofcarrying out the provisions of the Act. The wordings of Sections14 and 14(1-A) are clear and explicit. The Rules and the Act, therefore, must be construed, having regard to the basicEprinciples of interpretation in mind.”

28. Reliance, as noticed hereinbefore, however, has been placedby the learned Additional Solicitor General on Essar Gujarat Ltd.[”]

Thereafter, the decision of this Court in Essar Gujarat Limited[5]was considered and it was observed:F

“36. Therefore, law laid down in Essar Gujarat Ltd. and J.K.Corpn. Ltd. is absolutely clear and explicit. Apart from the factthat Essar Gujarat Ltd. was determined on the peculiar factsobtaining therein and furthermore having regard to the fact thatGthe entire plant on “as-is-where-is” basis was transferred subjectto transfer of patent as also services and technical know-howneeded for increase in the capacity of the plant, this Court clearlyheld that the post-importation service charges were not to be takeninto consideration for determining the transaction value.

37. The observations made by this Court in Essar Gujarat Ltd.1in para 18 must be understood in the factual matrix involved therein.The ratio of a decision, as is well known, must be culled out fromthe facts involved in a given case. A decision, as is well known, isan authority for what it decides and not what can logically bededuced therefrom. Even in Essar Gujarat Ltd.1a clear distinctionhas been made between the charges required to be made for pre-importation and post-importation. All charges levied before thecapital goods were imported were held to be considered for thepurpose of computation of transaction value and not the post-importation one. The said decision, therefore, in our opinion, is notan authority for the proposition that irrespective of nature of thecontract, licence fee and charges paid for technical know-how,although the same would have nothing to do with the charges atthe pre-importation stage, would have to be taken into considerationtowards computation of transaction value in terms of Rule 9(1)(c)of the Rules.

38. The transaction value must be relatable to import of goodswhich a fortiori would mean that the amounts must be payable asa condition of import. A distinction, therefore, clearly exists betweenan amount payable as a condition of import and an amount payablein respect of the matters governing the manufacturing activities,which may not have anything to do with the import of the capitalgoods.”

13. The aforesaid decision found that the Technical AssistanceFee under Article 4 had direct nexus with post importation activities andnot with importation of goods. That deduction was arrived at afterconsidering the individual facts and the scope of Article 4 which was tothe following effect:- “4. Additional assistance (a) At the licensee’s written request, the licensor may furnish thelicensee with manufacturing, engineering and other know-howand information relating to the licensed products which arenot readily available in the licensor’s records but which thelicensor is willing to develop especially for the licensee, andwhich shall be furnished through such documents and assis-tance as designated at the discretion of the licensor from among A

B

C

D

E

F

G

H

those stipulated in Appendix D attached hereto and any otherdocuments and assistance from time to time designated bythe licensor.

A

(b) In the event of the preceding para (a), the licensee shall paythe licensor all fees, and all costs and expenses incurred byBthe licensor in developing and furnishing such know-how,information, documents and/or assistance.

(c) If the assistance rendered under para (a) hereof is technicalassistance or engineering assistance concerning the licensedproducts, such assistance will be provided in accordance withCthe procedures and conditions set forth in Appendix E attachedhereto.”

The subsequent decisions of this Court in Commissioner ofCustoms, Ahmedabadvs.Essar Steel Ltd.[6],and in Commissioner ofCustoms (Import), Mumbai vs. Hindalco Industries Ltd.[7] haveDfollowed the same principle that technical agreements involved in saidcases pertained to post-importation activity. To similar effect was theconclusion by this Court in an earlier decision in Commissioner ofCustoms, New Delhi v. Prodelin India (P) Ltd.[8]that technical knowhow fee was in respect of post-importation activities and could not beadded to the value of the imported goods.

E

14. It is a matter of record that after considering the purchaseorder in the instant case, the Tribunal found that apart from supply ofequipment, necessary software had to be embedded in the equipmentbefore the supply was effected. The facts also disclose that out of 19items indicated in the Bill of Entry, only 8 items were physically presentedFwhile the rest were already embedded in the main unit. These facts arenot only reflective that the individual components were intended tocontribute together and attain a clearly defined function as dealt with inNote 4 of Section XVI as stated above, but also indicate that softwarethat was embedded through cards in the main unit, was not any post-Gimportation activity. The value of the software and the concernedservices were therefore rightly included and taken as part of theimportation.

62015 (319) ELT 202 = (2015) 8 SCC 1757(2015) 320 ELT 42 (SC) = (2015) 14 SCC 750H82006 (202) ELT A130 = (2006) 10 SCC 280

15. The facts on record as stated above further disclose that theDepartment was therefore right in invoking principle under said Note 4and considering the imported items as part of one apparatus or machineto be classifiable under the heading appropriate to the function. Thesubmission advanced by the Appellant in that behalf therefore has to berejected.

16. Rule 9(1)(b) of 1988 Rules as quoted above in the decision inToyota Kirloskar[4], case shows that the value in respect of “materials,components, parts and similar items incorporated in the imported goods”has to be added while determining the transaction value. Said Rule 9 isalmost identical to Rule 10 of 2007 Rules. Thus, even if the governingrule is taken to be Rule 9 of 1988 Rules, there would be no difference inthe ultimate analysis.

17. Consequently, we do not find any merit in the present appeal.Affirming the view taken by the Tribunal, we dismiss this appeal, withoutany order as to costs.

Ankit Gyan

Appeal dismissed.

A

B

C

D

E

F

G

H