Customs valuation excludes know-how and licence fees unless tied to imported goods and payable as a sale condition.

Licence and technical assistance fees payable to foreign collaborators were held not includible in the customs assessable value of imported components under Rule 9(1)(c) of the Customs Valuation Rules, 1988, because the agreements showed the payment was for technical know-how and assistance to manufacture licensed products, not consideration for any particular imported goods. The required nexus between the fee and the imports was absent, and the fee was not shown to be payable directly or indirectly as a condition of sale of those goods. Provisional assessments were directed to be finalised without adding the fee to customs value.

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Issues: Whether the technical documents fee payable to foreign collaborators as licence fee was includible in the assessable value of the imported components under Rule 9(1)(c) of the Customs Valuation Rules, 1988.

Analysis: The licence and technical assistance agreements showed that the fee was paid as consideration for technical know-how and assistance enabling manufacture of the licensed products. The imported components, spares, capital goods and tools were used for such manufacture, but the payment itself was not made in relation to any particular imported goods. The agreements did not show that the fee was payable directly or indirectly as a condition of sale of the imported components, and the requisite nexus between the fee and the imported goods was absent.

Conclusion: The fee was not includible in the assessable value of the imported components under Rule 9(1)(c), and the finding was in favour of the assessee.

Final Conclusion: The appeal succeeded and the provisional assessments were directed to be finalised without adding the technical documents fee to the customs value of the imports.

Ratio Decidendi: A licence or know-how fee is includible in customs valuation only when it is related to the imported goods and payable, directly or indirectly, as a condition of sale of those goods.

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