2009 (1) TMI 643

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....-6-98 entered into between them for manufacture at their factory in India. The appellant manufacture the products out of raw material/semi-finished articles or components imported from the collaborators and sell the same under the name "Crompton Greaves Ltd." in the domestic market. They were paying duty on the imported items at the value at which they have procured the same from the collaborator and this value after due scrutiny was accepted by the Dy. Commissioner (Valuation Cell) vide his order-in-original dated 29-6-2000. The Dy. Commissioner in his order inter alia observed that the value of the goods received from their supplier is based on quotation and purchase order. They have imported the components and other parts from their coll....

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.... Commissioner (A). In its appeal, it was contended by the revenue that the adjudicating authority while accepting the transaction value under Rule 4(3), has ignored the fact that it is mandatory to make adjustments in terms of Rule 9 of the Customs Valuation Rules, 1988. The technical know-how is related to imported goods because imported goods are of no value to the importer unless they are processed in accordance with the manufacturing process contained in the technical information supplied by the collaborator. Obtaining a licence from BTR was a pre-condition of sale and in consideration of the know-how and for use of trade marks, Joint Venture Company shall pay to BTR a technical assistance fee. As per Rule 9(1) of Customs Valuation Rule....

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....ump sum fee can be added only if there is a condition in the agreement that the components and parts shall be procured from the collaborators only and from no other source. It was submitted that there is no such condition in their agreement and for this purpose attention was invited to the technical agreement wherein clause 2.2(c) it has been stated that the technical information shall include information as to the kind, type and best source of supplies for purchase of purchase of such raw materials and chemicals are needed for the manufacture of the products. In the entire agreement, there is no clause which binds them to procure the material and component parts from the collaborators only and therefore the know-how and royalty agreement c....