Technical know-how fee excluded from customs value absent import condition and direct nexus with imported goods.

Technical know-how fee paid under separate agreements for manufacture in India was not includible in the assessable value of imported capital goods or inputs under Rule 9(1)(c) because the agreements did not make the payment a condition precedent to import and no direct nexus with the imported goods was shown. Any connection, if at all, was only with products manufactured in India, and the absence of proof of payment of the later amount also defeated loading it into value.

---

---

Issues: Whether technical know-how fee paid to the foreign supplier was required to be added to the transaction value of the imported capital goods and inputs under Rule 9(1)(c) of the Customs Valuation Rules.

Analysis: The fee was paid under separate agreements for transfer of technical know-how for manufacture in India. There was nothing in the agreements to show that payment of the fee was a condition precedent for import of the capital goods or inputs, nor was there any demonstrated relation between the fee and the imported goods as required by Rule 9(1)(c). The payment, if any relation existed, was only with the products manufactured in India. The absence of evidence of payment of the later amount also negatived any proposal to load that amount into the assessable value.

Conclusion: The technical know-how fee was not addable to the price of the imported capital goods or inputs under Rule 9(1)(c), and the appeal succeeded.

Ratio Decidendi: A technical know-how fee is not includible in the assessable value of imported goods unless it is payable as a condition of import and has a direct nexus with the imported goods.

---