2004 (5) TMI 458

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.... under Rule 9(1)(c) of Customs Valuation Rules, 1988. Appellant is a joint venture company formed by three joint ventures, namely, M/s. L.M. Glasfiber A/S (LMG) Denmark, the Industrialization Fund for Developing Countries (IFU) Denmark and NEPC Micon Limited. Initially the shareholding was in the ratio of 45% : 39% : 16%. With effect from 19-6-2002 LMG acquired 100% of the shareholdings of the appellant company with the approval of FIPB Authorities. 2. Appellant company was formed with the objective of manufacturing blades for wind turbine generators. They entered into three separate agreements with LMG on the following terms : S. No. Date of Agreement Purpose Item Consideration 1. 22-4-1994 Production know-how 2 models of ro....

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....buyer was not required to pay licence fee as a condition of the sale of the goods. The lump sum know-how fee is paid towards technical know-how, namely, suppliers' technical expertise in the manufacture of the products in India in the form of engineering drawings, material specification, work process sheets, lamination schedule, photos showing tools and moulds specifications and quality assurance manual. Technical knowledge provided is for the manufacture of blades of wind turbines in India and for training which are all post importation activities. They are not related to the capital goods (moulds) or other raw material/components imported. It is also contended that no part of the agreement stipulates that the lump sum know-how fee is a co....

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....or blades covered by the agreement in India. The foreign collaborator agreed to transfer over the period of the contract its production know-how related to rotor blades. Know-how transfer of rotor blade comprises of (1) Engineering Drawings (2) Material Specifications (3) Work Process Sheets (Work Instructions) (4) Lamination Schedule (5) Tool & Mould Specifications (Photos) and (6) QA Manual. Licence fee is payable for the transfer of production know-how as above. We do not find any merit in the view taken by the Commissioner that such licence fee paid in respect of transfer of know-how for production of rotor blade in India are to be added to the capital goods, raw materials and other components imported for the manufacture of rotor blade....