Tribunal excludes assembling fees from imported machinery valuation

The Tribunal held that the Commissioner erred in including fees for transfer of know-how and assembling/start-up in the valuation of imported plant and machinery. The Tribunal emphasized that charges for assembling services should not be included if paid separately, citing a Supreme Court decision. The appellant successfully argued that the know-how and assembling/start-up fees were separate from the sale of the machinery, leading to the appeal being allowed and granting consequential relief to the appellant.

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Issues Involved: Valuation of imported plant and machinery including fees for transfer of know-how and assembling/start-up.

Summary:
The appeal concerns the valuation of plant and machinery imported by M/s. Polar Marmo Agglomerates Ltd. under a collaboration agreement with M/s. Breton S.P.A. Industria Meccanica, Italy. The Commissioner (Appeals) added fees for transfer of know-how and assembling/start-up to the assessable value of the imported goods, which is contested by the importer.

The appellant argued that the Commissioner misinterpreted the contract terms and wrongly applied precedents like Essar Gujarat. They contended that the transfer of know-how and assembling/start-up fees were separate from the sale of the machinery. The appellant highlighted that the know-how license granted was for agglomerate stones, not the imported machinery, and that the fees were not a condition for the sale of the machinery.

The Departmental Representative argued that the machinery's value should include the know-how and assembling/start-up fees, as without these, the imported machinery would serve no purpose. However, the Tribunal referred to the Supreme Court's decision in Tata Iron & Steel Co. Ltd., emphasizing that charges for assembling services should not be included in the value of the goods if paid separately.

Regarding the Essar Gujarat case, the Tribunal found that the transfer of license and know-how was not a condition for the purchase of the machinery in the present case. Therefore, the Tribunal held that the Commissioner erred in including the additional fees in the valuation and allowed the appeal, granting the appellant consequential relief.

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