TaxTMI 
TaxTMI 
2000 (10) TMI 494
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....Corporation was to provide the know-how for the manufacture and M/s. Mitsubishi Corporation was to supply proprietary equipment of M/s. Toshiba Corporation. The agreement for supply of know-how covered all technical knowledge, information and technical data relating to the manufacture of colour picture tubes of the specified types including specification of relevant equipment for production of colour picture tubes and procedure for production, testing and quality assurance of the product. The appellants were to pay Yen 65 as know-how and technical documentation fee to M/s. Toshiba Corporation for the supply of know-how. In addition royalty was also payable in respect of picture tubes manufactured in India. Dispute arose with the Customs aut....
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....present case. Their submission is that the proprietary equipment are made according to the designs supplied by Toshiba and no design is supplied for the proprietary equipment by the buyer. They contend that this position is clear from Article 1.12 of the collaboration agreement among the three parties. The appellants have submitted that the fundamental requirement for the application of Rule 9(1)(b)(iv) is that services covered by that sub-rule, namely, engineering, development, art work, design work etc. should have been supplied by the buyer of the imported goods, which is not the situation in the present case. 4. Rule 9 relates to cost and services which are to be included in the price of the imported goods. Rule 9(1)(b)(iv) read....
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....here than in India and necessary for the production of the imported goods and paid for by the importer are to be included in the assessable value. He has submitted that according to the tripartite agreement signed between the appellants on the one hand and M/s. Toshiba Corporation and M/s. Mitsubishi Corporation on the other, the equipment supplied by M/s. Mitsubishi Corporation are proprietary to M/s. Toshiba Corporation and according to Sl. No. 1.12 of the agreement, "'proprietary equipment' shall mean equipment to be supplied by Contractor (M/s. Mitsubishi Corporation), manufactured by Licensor (M/s. Toshiba Corporation) or got manufactured by Licensor/Contractor to Licensor's design at specific manufacturers as per listed in Annexure-F"....
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....n on general arrangement and dimensional detail prior to release of the drawings for shop fabrication in case there occurs substantial changes from those indicated in Basic Design Engineering Document. Learned DR submitted that in a case where engineering, development, art work, design work, plans and sketches are undertaken elsewhere than in India and necessary for the production of the imported goods at the cost of the importer, that cost is to be included in the assessable value. He submitted that in the instant case, design work, plans and sketches etc. for the proprietary equipment were done by M/s. Toshiba Corporation and all these formed part of the know-how which was paid for by the importer. These were done abroad by M/s. Toshiba a....
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.... Italy and West Germany as per design and engineering supplied by M/s. Davy Mekee and these machineries were supplied to M/s. Andhra Petro Chemicals. The Tribunal held that the cost of such drawings, designs supplied by M/s. Mekee are to be added to the value of the machinery manufactured by third parties in UK, Italy and West Germany while assessing them to customs duty. This judgment of the Tribunal has been confirmed by the Supreme Court and the decision of the Apex Court is reported in 1997 (90) E.L.T. 275 (SC). Learned DR submitted that in the present case also, manufacture of the proprietary equipment by M/s. Mitsubishi or others took place according to the designs, drawings etc. supplied by M/s. Toshiba and M/s. Toshiba had been paid....