TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 264
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....ed Products. This clearly shows that knowhow supplied is related to imported goods and a condition of sale. As per S.C. decision in Mahindra & Mahindra Ltd., 1995 (76) ELT 481 (S.C.), apparent tenor of the agreement reflects real state of affairs. The importer have failed to show that the apparent is not real. The importer have cited same Tribunal decision. But in view of clear provision of the agreement and Hon'ble Apex Court decision, same are not applicable here. As per their own admission, the importer in their reply dated 25th October, 2000, have stated that the imported goods are manufactured as per their design and specification and not available outside. They are not importing similar items from any other supplier. Hence conclusion of the adjudicating authority is not warranted. The Departmental appeal is disposed as above terms." 2. The facts of the case is that the appellant have a Collaboration agreement with the supplier of imported goods, under the said agreement, the appellant is required to pay the Collaborator, documentation charges at rate of 30,000 Yen per sheet for Japanese version and 40,000 Yen for English version. As per the adjudicating authority th....
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....he goods of the foreign collaborator, therefore the lump-sum amount payable under the name of technical knowhow is includible in the value of imported goods. In support of his submission reliance placed on the judgment of Tribunal in the case of Commissioner of Customs (I), Mumbai Vs. Mahendra Suiting Ltd. - 2008 (226) ELT 747 (Tri.-Mumbai). 5. We have carefully considered the submissions made by both the sides. 6. We find that the amount payable as per the agreement, is clearly on account of technical knowhow provided by the foreign Co. for the manufacture of final product by the appellant. On perusal of the agreement, we find that it is an agreement for licence and technical assistance. The relevant portion and clauses of the agreement are reproduced below:- "WHEREAS, Licensee has been engaged, inter alia, in the manufacture and sale of its bearings and desires to upgrade the process and product technology for achieving higher productivity and lowering rework and scrap rate of parts/products; WHEREAS, Licensee further desires to manufacture assemble, use and sell licensed Products (as defined hereinafter) and to obtain necessary technical information and know-how, including....
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....no charge to Licensee, those items of the Technical Documents which are later found to be deficient damaged or to contain defects that would affect the normal use of the Technical Documents. NSK will furnish or replace such items of Technical Documents within thirty (30) days of receipt of such notification by Licensee. 3.5. Licensee shall pay NSK the Technical Documents fee at the rate of Thirty thousand (30.000) Yen for the Japanese version and Forty thousand (40,000) Yen for the English version per sheet within thirty (30) days after the date of receipt of invoice from NSK. 4. ARTICALE IV - TECHNICAL ASSISTANCE 4.1. NSK shall provide technical guidance to Licensee by dispatching NSKs engineers (hereinafter referred to as Engineers) to Licensee to advise and assist Licensees technical personnel on matters relating to the manufacture, assembly and product application of the Licensed Products. Such technical guidance shall be made during the term of this Agreement. The number of Engineers and the period during which they will be dispatched shall be determined by mutual consent between the parties. 4.2. For such technical services, Licensee shall pay the following withi....
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....that there is any link between quantum of import and the payment terms related thereto provided in the agreement. Since the agreement is, towards technical knowhow which is related to the manufacture of the final product and not related to the sale of imported goods, fees cannot be included in the assessable value of the imported goods. The adjudicating authority with proper application of mind, adjudicated the matter by giving the following findings:- "I have carefully gone' through the various documents produced and certificate and random copies of invoices and Bills of Entry furnished by M/s. The Antifriction Bearings Corpn. Ltd., Mumbai from the foreign supplier M/s. NSK, Ltd., Japan. It is observed that there is only the Licence and technical Assistance between M/s. The Antifirction Bearing Corporation Ltd. (i. e. the Indian Company) and the foreign collaborators M/s. NSK Ltd. Oksaki, Tokyo Japan. The agreement is for obtaining necessary technical information and know-how including Drawings and specifications from NSK to manufacture, assemble, use and sell the Licensed products I and II. The Licensed products I are Ball and Tapered Roller Bearings of Standard internat....