TaxTMI 
TaxTMI 
2003 (11) TMI 373
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....ne was rejected by the Dy. Commissioner of Customs. On appeal by the importer, the Commissioner (Appeals) accepted the claim and ordered sanction of refund. This appeal by the Commissioner is against that order. 2. The machine in question was imported in November 1998 from Macro Traders Ltd., Dhaka in Bangladesh. The value declared for the set of parts which was comprising the machine in the suppliers invoice value of US $ 25000. In the declaration that accompanied the bill of entry, the importer stated that in terms of joint venture agreement the supplier was entitled to "issue and allotment of equity shares in the importer company." The agreement referred to was an agreement between Macro Traders Pvt. Ltd., Bangladeshi company and....
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....hus determined the value of the imported machine to be Rs. 36,81,793/-. The importer paid duty of this amount. 4. Subsequently, the importer filed a claim for refund on the ground that the joint venture agreement between the parties had been terminated on account of disputes between them and therefore the enhancement that was carried out of the value of the machine by Rs. 27.08 lakhs should not be effective. It claimed refund of the duty paid on this sum. The Dy. Commissioner did not accept these contentions. He noted that the service provided by the Bangladeshi company in terms of the joint venture agreement comprise transfer of technical know-how provision of scale and support service and technical supervision of the manufacturing....
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....uded in the value. He did not accept the contention that the joint venture agreement had been terminated by the notice dated 9-2-99 issued by the importer Macro Traders. Clause 25.2 of the agreement provided for termination at any time by agreement in writing signed by both parties. In the absence of this consent by the Bangladeshi company to the agreement it continued to be in force. He therefore dismissed the claim. 5. On appeal by the importer the Commissioner (Appeals) allowed the appeal. He accepted the contention of the importer that the amount share of Rs. 108.31 lakhs were not issued for supply in Company and therefore nothing was paid to it over and above the sum of Rs. 25,000/- per machine. The payment of the entire amount....
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....in Essar Gujarat Ltd. will not apply because the purchase by the importer of know-how was not a condition of sale. There was no agreement between the foreign supplier and Balsara Extrusions Pvt. Ltd. The joint venture agreement itself did not come into effect therefore the condition in that agreement relating to payment of know-how would not apply. 8. We have noted the know-how that was to be provided by Macro which is specified in schedule 2 to the agreement. It includes formulation/recipe of mosquito coils; specification of raw material its source of supply raw material indigenous substitution; drawings for machines and foundation operating and maintenance manual for the machinery, quality control manual; process charge and other ....
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....ead that this is the cost of the machine alone. It would then mean that supply of know-how including setting up and commissioning the machine would be performed free by the supplier. It is not unreasonable to conclude that the price of the machine as distinguished from the cost to be payable of the know-how is $ 25000. 9. The departmental representative was at pains to emphasise that the cost of the machine roughly was less than the amount payable for the know-how of Rs. 37 lakhs. That the cost of utilising the machine may be higher than its cost does not itself give arise to suspicion. The relative cost of the machine and the know-how may depend on the quality and cost of consideration of one and the know-how and the extent of know....