Technical know-how fee excluded from customs assessable value where payment was for manufacture assistance, not imported components.

Technical know-how and assistance fees paid under a licence agreement were not includible in the assessable value of imported components under Rule 9(1)(c) of the Customs Valuation Rules, 1988, because the payment was for manufacture of licensed products in India and not for the imported goods themselves. Inclusion required a nexus with the imported goods and a condition of sale of those goods; on the stated facts, those requirements were not met. The fee was therefore not added to the transaction value or assessable value.

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Issues: Whether the technical know-how fee paid under the licence agreement was includible in the assessable value of the imported components under Rule 9(1)(c) of the Customs Valuation Rules, 1988.

Analysis: The fee was paid for technical know-how and assistance for manufacture of the licensed products in India, and not for the imported components as such. Inclusion under Rule 9(1)(c) depended on the payment being related to the imported goods and being a condition of sale of those goods. On the facts, the licence fee did not satisfy these requirements and was therefore not liable to be added to the transaction value or assessable value.

Conclusion: The technical know-how fee was not includible in the assessable value of the imported goods and the assessee succeeded on the valuation issue.

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