Technical know-how fee not added to import value where payment related only to manufacture in India.

A lump sum paid for technical documentation, drawings and know-how used in manufacturing final products in India was not includible in the declared import price. The agreement showed that the payment related to technical assistance for manufacture, not to the imported goods themselves, so the addition contemplated by Rule 9(1)(c) did not apply. On that basis, the technical know-how fee could not be added to transaction value under Rule 4 for assessment purposes, and the assessable value was required to exclude that amount.

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Issues: Whether the lump sum amount paid towards technical documentation and drawings was required to be added to the declared price under Rule 9(1)(c) while determining the transaction value of the imported goods.

Analysis: The agreement was examined and the payment was found to relate to technical assistance, know-how, documentation and drawings for the manufacture of final products in India. The relevant clauses did not establish that the amount was paid in relation to the imported goods themselves. Since the addition contemplated by Rule 9(1)(c) applies only where the payment is connected with the imported goods, the technical know-how fee could not be added to the price under Rule 4 for acceptance as transaction value.

Conclusion: The amount paid towards technical documentation and drawings was not includible in the assessable value, and the issue was decided in favour of the assessee.

Ratio Decidendi: A payment for technical assistance or know-how is not addable to the declared import price unless it is shown to be in relation to the imported goods and not merely to the manufacture of the finished products in India.

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