Case Details: Coal India Ltd. Versus Commissioner of Customs (Port), Kolkata (2025) 30 Centax 128 (S.C.)
Judiciary and Counsel Details
- Abhay S. Oka & Ujjal Bhuyan, JJ.
- Arvind Kumar Sharma, Mukesh Kumar Maroria & G.S. Makker, AOR, for the Respondent.
Facts of the Case
The assessee, an importer and the petitioner in the present case, entered into a contractual arrangement for the import of goods from a foreign supplier. As part of this arrangement, the petitioner was required to make an additional payment of 8% to 10% of the FOB (Free on Board) value of the goods to an Indian company acting as the local agent of the foreign supplier. This payment was made over and above the FOB value and was stipulated as a condition of sale by the foreign supplier. At the time of customs assessment, the Revenue contended that this additional payment should be included in the assessable value of the imported goods.
The assessee argued that the payment was for agency commission, related to services rendered post-importation, and thus, it should not form part of the assessable value. The matter was adjudicated by the lower authorities, who held that the payment had no nexus to any actual services provided by the Indian agent and was instead a condition of sale. The Revenue’s view was upheld by the Commissioner (Appeals), and the petitioner then appealed to the Kolkata Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Tribunal, after considering the facts, found that the payment was directly related to the import transaction and was a condition of sale, thus included in the assessable value under Rule 9(1)(e) of the Customs Valuation Rules, 1988. The petitioner, aggrieved by this decision, filed an appeal before the Hon’ble Supreme Court of India.
Supreme Court Held
The Hon’ble Supreme Court held that the payment made by the petitioner-importer to the Indian agent of the foreign supplier was correctly included in the assessable value of the imported goods. The Court found that the services provided by the Indian agent were not post-importation services but were directly related to the import of the goods. The Court emphasised that under Rule 9(1)(e) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, payments made as a condition of sale must be included in the assessable value. The Court further noted that such payments, even when routed through an Indian agent, had a direct nexus to the sale and were not to be excluded from the value of the goods. The Court affirmed the findings of the lower authorities, including the Tribunal, and dismissed the appeal, holding that the payment was rightly included in the assessable value under Sections 14(1) and 14(1A) of the Customs Act, 1962.
List of Cases Reviewed
- Coal India Ltd v. Commissioner — 2010 (258) E.L.T. 406 (Tri. – Kolkata) — Affirmed [Paras 1, 2, 13, 15.4, 16, 25, 26]
List of Cases Cited
- Collector v. Essar Gujarat Ltd. — 1996 (88) E.L.T. 609 (S.C.) — Referred [Para 15.3]
- Commissioner v. Ferodo India (P) Ltd. — 2008 (224) E.L.T. 23 (S.C.) — Relied [Paras 15.3, 32, 33]
- Commissioner v. J.K. Corpn. Ltd. — 2007 (208) E.L.T. 485 (S.C.) — Noted [Paras 15.3, 30, 31]
- Tata Iron & Steel Co. Ltd. v. Commissioner — 2000 (116) E.L.T. 422 (S.C.) — Referred [Para 15.3]
