Customs valuation and reproduction rights: payment for technical drawings and manuals remained includible in assessable value.

Customs valuation under Rule 9(1)(c) requires royalties and licence fees to be added to the assessable value when payable as a condition of sale, but excludes charges for the right to reproduce imported goods in India. On the memorandum of understanding, the payment was for technical assistance, documentation, drawings and manuals for tractor manufacture, and no part of it was shown to be a separate charge for reproduction rights. The photocopying and related service charges were also distinct from any reproduction right. The amount was therefore not excludible, and the assessable value was properly affirmed.

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Issues: Whether the amount paid under the memorandum of understanding, apart from the photocopying and related service charges, was excludible from the assessable value of imported drawings and manuals as consideration for the right to reproduce the imported goods under Rule 9(1)(c) of the Customs (Valuation) Rules, 1988.

Analysis: The valuation question had to be decided strictly under Rule 9(1)(c) and the interpretative note. That provision requires addition of royalties and licence fees related to the imported goods when payable as a condition of sale, but excludes charges for the right to reproduce the imported goods in the country of importation. On the terms of the memorandum of understanding, the consideration was for the supply of technical assistance, documentation, drawings and manuals for upgrading tractor manufacture, and there was nothing to show that any part of the amount represented a separate charge for reproduction rights. The payment to the transmitting agency for photocopies and related services was also distinct from any reproduction right.

Conclusion: The amount in dispute was not excludible as consideration for reproduction rights, and the assessable value was correctly affirmed against the assessee.

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