TaxTMI 
TaxTMI 
2007 (10) TMI 103
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....alf of M/s. Fonderia Perucchini, Italy under which Kinglor agreed to provide to DFTL and or its associates, the process and technical know-how and other advisory services required for enabling DFTL to set up a plant for manufacture of precision castings. As per the agreement it was decided that KINGLOR would, if required by DFTL, arrange for supply of plant & machinery and equipments at a price to be mutually decided by both the parties. DFTL entered into negotiation with Kinglor for purchase of some capital goods and placed purchase orders on KINGLOR as well as on Fonderia Perucchini On 24th July 1997, Birla Perucchini Ltd. (the appellants herein) was incorporated and registered under the Companies' Act 1956 On 22nd December, 1997 a tripar....
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....nd 10.26% equity in BPL and further held that the supplier had undertaken to provide detailed engineering and design of equipment which was to be supplied by the foreign company and therefore, the value of such detailed engineering and design of equipment was required to be included in the invoice value. The lower appellate authority upheld the Order of the Dy. Commissioner holding that such value is required to be added in terms of Rule 9(1) of the Customs Valuation Rules, 1988. Hence this appeal. 3. We have heard both sides. 4. The relevant clauses of the agreement are reproduced herein :- "2.1.1 In pursuance of the collaboration between DFTL and KINGLOR, KINGLOR agrees to provide to DFTL in English the layout of the plant & mach....
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....achinery, buildings and other facilities as also the process including specifications and quantities of raw materials and other facilities required for the process. All these information will be given in the final feasibility report to be provided to DFTL within 4 weeks from the effective date of the agreement; (ii) KINGLOR shall provide to DFTL detailed information of design and load date for various buildings, foundations etc. within a period of 6 weeks and drawings for installation of within a period of 6 weeks and drawings for installation of plant, machinery and all equipment within 10 weeks from the effective date of the agreement incorporating the effect of all comments and suggestions given by DFTL and accepted by KINGLOR; (ii....
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....with the over-seas supplier was for supply of technical know-how for the manufacture of precision castings of the appellants in India and had no relation with the capital goods being imported. Clause 2.1.1 of the Technical Collaboration Agreement provides that the foreign supplier will provide to the appellants the lay out of the plant & machinery and equipment for the foundry and specifications and designs on the basis of which plant & machinery and equipment etc. will be installed. In other words the designs to be supplied by KINGLOR are for the installation of the Plant & machinery and equipment n the factory of the appellants in Aurangabad, and this clause cannot be interpreted to mean that the design for the imported capital goods will....
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....pellants required, which would mean that the appellants were free to procure capital goods required for setting up of its plant in India from any other supplier either in India or abroad The contention of the ld. SDR that payment of fee was a condition of sale of the imported capital goods for the reason that the foreign supplier ensured that the precision casting is to be produced in India would be of internationally acceptable quality and the appellants therefore, could not have purchased the capital goods from any other supplier cannot be accepted in the light of clause 4.2.1 of the agreement The decision of the Tribunal in Otto India Pvt. Ltd. v. CC, Kolkata - 2002 (149) E.L.T. 477 (Tri.- Kolkata), upheld by the Apex Court in 2003 (158)....