1994 (1) TMI 147

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llaboration agreement on 1-8-1989, with M/s. Sanshin Chemical Industry Co. Japan, to set up a plant for manufacture of insoluble sulphur in India. They filed an application for allowing import of machinery and equipment for manufacture of the said product, under the project import. On scrutiny of the documents it was noticed that the importers were required to pay lump-sum amounts in foreign exchange towards know-how fee and for basic engineering, to their collaborators in Japan, besides they were also required to pay royalty on the price of the product, sold in India and abroad. Under show cause notice dt. 12-9-1991 it was alleged that all payments made to the collaborators towards the engineering information supplied for the design and ma....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....no loading of the invoices was called for, the learned Consultant relied upon the following decisions : (1) CC v. Vishakhapatnam Steel Project - 1992 (62) E.L.T. 572 (Trib.) (2) CC v. Vishakhapatnam Steel Project - 1992 (62) E.L.T. 833 (Trib.) (3) Essar Gujarat Limited v. CC - 1991 (56) E.L.T. 221 (Trib.) (4) CC v. Maruti Udyog Limited - 1987 (28) E.L.T. 390 (Trib.) (5) CC v. Modi Zerox Limited - 1990 (48) E.L.T. 141 (Trib.) (6) UOI v. Mahindra and Mahindra Limited - 1991 (55) E.L.T. 15 (Bom.) 5.1 Shri Prabhat Kumar the learned SDR dealt with the facts of the case and referred to the declaration of the appellants in their application for the registration of contract under Heading 9801 of the Schedule to the Customs Tari....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o design and engineering in respect of the goods imported was done by the collaborators. 7. We have carefully gone through the facts and circumstances of the case and have given our due thought and consideration to the submissions made by both the sides. 8. We find that while in the agreement, there is no reference to the machinery, equipment, instruments etc., for manufacturing facilities, they have been partly imported from Japan and partly fabricated in India. The collaborators as per agreement had undertaken to supply the basic design information. The detailed engineering data and drawings were to be prepared by the appellants. In respect of the goods fabricated in India, M/s. ICB were commissioned to provide engineering services,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... approved by SCIL, and inspection reports certified and approved by SCIL, one month before the despatch of equipment. (pages 138, 181 and 242 of the paper book); how the collaborators was paid/compensated for these services relatable to the goods imported, is not clear. It is seen from Appendix 7 to the agreement that the collaborators have chosen to put in writing such petty details as regards payments relating to laundry, postage, beverages etc. 10. The whole of the basic engineering fees of 85 million yen has been ordered to be added to the price of the imported goods amounting to 191 million yen (page 261 of the paper book); it is not understood as how in any case the whole of the basic engineering fees could be added only to the pri....