Technical know-how linked to import supply contracts is includible in assessable value when it forms a condition of sale.

Technical know-how, documentation and training charges are includible in the assessable value of imported goods where the contract makes those services an integral part of the supply arrangement and a condition of sale. Applying the principle in Essar Gujarat Ltd., the text states that such linked payments form part of the import value under Project Import Heading 98.01, while Tata Iron & Steel Co. Ltd. was treated as factually distinguishable. On that basis, the inclusion of the technical know-how fee was upheld and the contrary challenge failed.

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Issues: Whether 10% of the technical know-how, documentation and training fee was includible in the assessable value of goods imported under Project Import Heading 98.01.

Analysis: The contract and its appendix showed that the foreign supplier was obliged to provide technical know-how and training along with the machinery. The technical know-how payment was therefore an integral part of the supply agreement and constituted a condition of sale. In such circumstances, the fee was includible in the assessable value. The principle applied in Essar Gujarat Ltd. governed the matter, and the decision in Tata Iron & Steel Co. Ltd. was found to be factually distinguishable. The appellate order also found no infirmity in the inclusion of 10% towards technical know-how.

Conclusion: The 10% technical know-how fee was rightly included in the assessable value.

Final Conclusion: The impugned order was upheld and the appeal failed.

Ratio Decidendi: Where technical know-how and related services are contractually integral to the supply of imported goods and form a condition of sale, the corresponding fee is includible in the assessable value of the imported goods.

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