Customs valuation excludes technical know-how and servicing fees where payments are unrelated to imported goods and sale conditions.

Licence fee for technical know-how and service fee for technical assistance were held not includible in the assessable value of imported parts under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988, because the supply agreement for the parts preceded the technical licence agreement, the licence fee related to wind turbine generators manufactured in India rather than the imported goods, and the service fee related only to post-manufacture servicing of the finished product. As neither payment was shown to relate to the imported goods or to be a condition of their sale, inclusion in customs value was rejected.

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Issues: Whether the licence fee payable for technical know-how and the service fee payable for technical assistance in servicing the wind turbine generators were liable to be added to the value of the imported parts and components under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988.

Analysis: The agreement for supply of parts and components was entered into earlier than the technical licence agreement, and the licence fee was payable in relation to the wind turbine generators manufactured in India rather than in respect of the imported parts. The service fee also related to post-manufacture servicing of the finished product and not to the imported goods. For inclusion under Rule 9(1)(c), the amount must relate to the imported goods and be payable as a condition of sale of those goods. On the agreement terms, neither payment satisfied those requirements.

Conclusion: The licence fee and the service fee were not includible in the assessable value of the imported goods, and the appeal succeeded.

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