ORDER
G.A. Brahma Deva, Member (J)
1. This is an appeal filed by the Department against the Order-in-Appeal No. C3/1420/82 dated 9-11-1983 passed by the Collector of Customs (Appeals), Madras.
2. Shri A.K. Singhal, learned JDR appearing for the Revenue submitted that issue relates to loading of invoice value of the plant and machinery imported by the respondents. He said that though the Plant and Machineries were supplied by third party, since the goods were imported at the specific advice of the collaborators and the lump sum payment made to the collaborators can be construed as buying commission and, accordingly, Assistant Collector was right in loading the invoice value of third party Suppliers by 2 /2% wherever selection has been done by the respondents’ collaborators. He contended that the service rendered by the collaborators are not mere and casual indication of the items of the machinery to be imported but much beyond the scope of mere selection. Since the collaborators obtained all the quotations and negotiated the purchases on behalf of the respondents and, as such, the pre-shipment services form part of the assessable value and as lump sum payment covered for such services a loading of 2 1/2% service charges were required to be added under Rule 8 of the Valuation Rules. He argued that Collector (Appeals) erred in holding that such service charges are not to be added on the ground that machineries were supplied by third party and the collaboration agreement does not specifically provide for payment of service charges.
3. Shri Pradeep Jain, learned Advocate, appearing for the respondents, while reiterating the findings of the Collector (Appeals), said that because of the collaboration agreement the Collaborator is selecting the machinery. Otherwise such machinery will be available at the same price at which they are available to other importers. There is no specific service charges for selecting the machinery. Payment made to the collaborators for the transfer of technical know-how neither can be construed as buying commission for selecting machinery nor part can be treated as service charges in the absence of specific allocation. He said that point relating to technical know-how charges was considered by the Tribunal in the cases of
Collector of Customs v. Modi Xerox Limited [1990 (48) E.L.T. 141]
,
Dynamatic Hydraulics Ltd. v. Collector of Customs [1990 (50) E.L.T. 85]
, and more particularly on the issue of pre-import service charges in the case of
Collector of Customs v. India Photographic Company Ltd. [1990 (49) E.L.T. 293)
.
4. We have carefully considered the arguments advanced on both sides and perused the records. On going through the records we find that neither authorisation given by the Collector is in the proper order nor appeal filed by the Department is in proper form. Section 129A(2) specifies that before giving authorisation to file an appeal Collector should express about the illegality or impropriety of the order against which the appeal is to be filed and direct the proper Officer to appeal on his behalf to the Appellate Tribunal against such order. In this authorisation the Collector simply authorises the Assistant Collector to file an appeal without expressing any opinion about the legality or otherwise of the order and, as such, there is no proper authorisation for filing the appeal. We find that presentation of appeal also is not in the proper form since neither department has filed any grounds of appeal nor it is clear on which points department is seeking relief in the absence of grounds of appeal. Form No. CA-3 should be accompanied with statement of facts and grounds of appeal but we find that appeal form is accompanied with number of pages in the form of commentary consisting of comments on the impugned order without raising specific grounds. The appeal filed by the department is liable to be dismissed on these preliminary grounds. Even on merits, we do not feel that case is in favour of the revenue. The burden lies on the department to prove undervaluation. The department ought to make out a case for undervaluation with sufficient evidence and to prove that value shown in the invoice was not the real value. There is no evidence to show that similar goods were sold at higher price or that the collaborators acted as agents to the foreign Suppliers in getting commission or due to their services resulted in reduction of value. Further payment made to the collaborators for transfer of technical know-how and such lump sum payment was made to their services where it is not possible for that reason to allocate the charges to individual consignments imported through them, no notional value can be added to the invoice value on account of buying commission or handling charges as it was rightly dealt with in the impugned order. We do not find any infirmity in the impugned order.
5. In the light of above we uphold the impugned order and, accordingly, the appeal is dismissed as it was already pronounced in the open court on 17-3-1992.