Customs valuation excludes separate know-how and licence fees where they are not part of the import price.

Customs valuation includes only amounts that form part of the price of imported goods as a condition of sale at the time of importation. Separate payments for post-importation technical assistance, know-how, or licence rights are excluded when they are independently identifiable and not additional price for the imported machinery. On the stated facts, the collaboration agreement covered rights to use patents, technical documentation, and manufacturing process, and the plant could also be sourced from independent manufacturers, so the licence and know-how fee was not includible in the assessable value of the imported plant and machinery.

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Issues: Whether licence fee and technical know-how payment under the collaboration agreement were includible in the assessable value of the imported plant and machinery for customs duty.

Analysis: Customs duty is chargeable on the value of imported goods at the time and place of importation. Under the statutory scheme, transaction value is the price actually paid or payable for the imported goods, with additions permitted only for amounts that form part of the price as a condition of sale. Payments for post-importation services, technical assistance, or know-how are excluded where they are separately identifiable and not linked to the imported goods as such. On the facts, the know-how and licence fee related to the right to use patents, technical documentation, and manufacturing process, and the agreement contemplated that the plant and machinery could be procured from independent manufacturers. The fee was therefore not an additional price for the imported equipment. The earlier authority relied upon by the Revenue applied on a different fact situation where the licence itself was a pre-condition for purchase of the plant.

Conclusion: The know-how and licence fee was not includible in the assessable value of the imported goods, and the issue was decided in favour of the assessee.

Final Conclusion: The appeal failed because the disputed payment was held to be outside the customs valuation of the imported plant and machinery.

Ratio Decidendi: Only payments that form part of the price of imported goods as a condition of sale at the time of importation can be added to assessable value; separate post-importation payments for know-how or technical assistance are not includible unless they are directly linked to the imported goods as additional price.

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