Tribunal Overturns Decision: Licence and Service Fees Not Added to Import Value Under Customs Valuation Rules.

The Tribunal set aside the Commissioner (Appeals)' decision, allowing the appellant's appeal. It concluded that the licence fee and service fee were not directly related to the imported components/parts and did not meet the conditions under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988, for addition to the import value.

---

---

Issues: Whether licence fee and service fee payable by the appellant are liable to be added to the value of imported components/parts under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988.

Summary:
The appeal involved a challenge against an order passed by the Commissioner (Appeals) regarding the addition of licence fee and service fee to the value of imported components/parts under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988. The Deputy Commissioner initially held in favor of adding these fees, which was later reversed by the Commissioner (Appeals). The Tribunal remanded the matter for reconsideration, leading to the Commissioner (Appeals) deciding to add the fees back to the value of imports.

The appellant argued that the licence fee and service fee should not be added under Rule 9(1)(c) as they were not directly related to the imported goods. The appellant emphasized that the licence fee was for R & D costs incurred by the foreign collaborator and the service fee was for technical assistance in servicing the WTG, not for the imported parts/components. The appellant cited relevant legal decisions to support their position.

The Departmental Representative contended that the fees should be added as per the Commissioner (Appeals) decision.

The Commissioner reasoned that the fees should be added as they were related to the assistance provided by the foreign supplier and the service of the manufactured product. The Commissioner noted the absence of evidence supporting the appellant's claim that parts could be procured from other sources.

The Tribunal disagreed with the Commissioner's view, stating that the technical know-how fee and service fee were related to the manufacture and service of the WTG in India, not the imported parts/components. The Tribunal found that the fees did not meet the conditions under Rule 9(1)(c) for addition to the value of imported goods. The Tribunal cited a previous case where a similar contention was upheld.

Therefore, the Tribunal set aside the previous order and allowed the appeal.

---