Tribunal excludes technical assistance and trademark fee from transaction value under Rule 9

The Tribunal held that the lump sum payment for technical assistance and the trade mark fee were not liable to be added to the transaction value under Rule 9(1)(c) and Rule 9(1)(d) respectively. The impugned order was set aside, and the appeal was allowed with consequential reliefs.

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Issues:
1. Whether the lump sum paid for technical information/assistance and the trade mark fee are liable to be added to the transaction value under Rule 9(1)(c) and Rule 9(1)(d) respectively.

Detailed Analysis:

Issue 1: Lump sum payment for technical information/assistance
The appellants imported items from a German company for manufacturing vacuum ironing tables under a Technical Collaboration Agreement. The Special Valuation Branch ordered a 20% loading on transaction value without considering the agreements. The Commissioner (Appeals) set aside the SVB order and directed valuation under Rule 7 of Customs Valuation Rules, 1988. The present appeal challenges the addition of DM 50,000 and trade mark fee to the transaction value. The Tribunal noted that the lump sum was for technical assistance in manufacturing the contract product, not related to the imported items. Previous decisions supported not adding technical fees to transaction value. Following precedent, the Tribunal held that DM 50,000 was not to be added under Rule 9(1)(c).

Issue 2: Trade mark fee
The Interpretative Note to Rule 9(1)(c) includes trade mark fees as payments analogous to royalties. The trade mark fee paid by the importer was 1% of the invoice value of the contract product sold in India. The Tribunal found a resemblance between trade mark fees and royalties, which were not added to transaction value. Overlooking the payment of royalty by the importer to the German company, the authorities erred in considering adding the trade mark fee. As both royalty and trade mark fee fall under Rule 9(1)(c), the Tribunal applied the same precedent as in previous decisions. Consequently, the Tribunal held that the trade mark fee paid by the importer was not to be included in the assessable value of the imported goods.

In conclusion, the impugned order was set aside, and the appeal was allowed with consequential reliefs.

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