TaxTMI 
TaxTMI 
2000 (1) TMI 801
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....s Ltd., Ludhiana, M/s. Japan Exlam Co. Ltd., Japan and M/s. Marubeni Corpn., Japan, as Joint Venture Company with the purpose of conducting the business of manufacture, marketing and distribution of acrylic fibres and tow. They imported various equipments for setting up 16500 T/Y acrylic fibre plant for manufacture of acrylic fibre from M/s. Marubeni Corporation, Japan in accordance with the terms and condition of an equipment supply contract entered into with them. The foreign supplier was found to be related to the importer in terms of Customs Valuation Rules, 1988 and hence the matter was taken up by the Gatt Valuation Cell for investigation of Valuation aspect. A questionnaire was supplied to the respondents and in the reply therein, th....
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....erchandise as M/s. Marubeni has no intellectual propriety over the same. (c) The technology and know-how fees are not a condition of the sale of the imported equipments. Both the contracts have termination clause which are not depending upon each other. (d) In the equipment supply contracts the seller M/s. Marubeni have indemnified the importer and confirmed that no third party intellectual property and/or industrial property rights will be violated by erection, use and operation of the equipments supplied. He ordered acceptance of transaction value and directed finalisation of pending provisional cases in the light of the above. 2. The Commissioner of Customs, Mumbai re....
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.... Marubeni Corporation have guaranteed that the equipment supplied by them conformed to process requirement and also extended warranty against design defects; that M/s. Marubeni had indemnified the respondents against any loss or damage etc. which would show that the designs were not supplied either directly or indirectly by the respondents to M/s. Marubeni. The Commissioner (Appeals) upheld the adjudication order and rejected the department's appeal holding as under :- "I have carefully gone through the records of the case and I find that the department has not been able to prove that the Buyer (the Respondent) has supplied any goods or services free of charge or at reduced cost to M/s. Marubeni for the supply of the imported goods. T....
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....arge to the supplier; (2) that the department has failed to prove that the technical documents were supplied/made available by Kawasaki to Marubeni either free of charge or at the instance of the respondent or that the cost was incurred by the respondents, and (3) that the technical know-how fees has nothing to do with the manufacture or sale of the final products manufactured by the respondents. 4. While the department does not dispute the first reason, the departmental representative contends that the technical know-how and documents supplied by or through the respondents are required for setting up of the plant for manufacture of acrylic fibre and without such technical know-h....
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....ns on this basis and forwarded the same for approval to M/s. Kawasaki who in turn sent them back to the respondents after approval and thereafter, the respondents supplied the designs to M/s. Marubeni, the design was not necessary for the production of the imported goods viz. battery limit equipments, but for the manufacture of acrylic fibre in India by the respondents and he, therefore, submits that the provisions of Rule 9(1)(b)(iv) are not attracted in this case. In support of his submission that the engineering design was not for use in the production of battery limit equipments supplied by M/s. Marubeni, he draws our attention to clauses in the agreement where M/s. Marubeni has put the respondents under an obligation of secrecy of its ....
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....relevant provisions of Section 129D are as under :- "(2) The Commissioner of Customs, may, of his own motion, call for and examine the record of any proceeding in which an adjudicating subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Customs in his order. (3) No order shall be made under sub-section (1) or sub-section (2) after the expiry of one year from the date of the decisio....