TaxTMI 
TaxTMI 
2016 (11) TMI 1517
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....al know-how, manufacturing and selling the range of pistons to the Joint Ventures (referred to as Honda Joint Ventures) in which Honda Motor Co. Ltd. has participated and/or will participate within India and other engines/vehicles, within the manufacture range of Honda. The respondent's case was registered in the SVB as related party transaction under Rule 2(2) of the Customs Valuation Rules, 1988. Various documents were called and after examination, the declared invoice value of the goods was accepted. Revenue challenged the said order before the Commissioner (Appeals), who rejected the Revenue's appeal by observing as follows :- "I have gone through the records of the case. The respondents are paying lump sum fees and royalty to the co....
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.... designed specific and restricted for the use in the specific engines only. It was argued that depending upon the capacity, thrust and other technical features of the engine, the alloy composition of the valves are also determined. The learned AR argued that payment of consideration for the know-how is linked to the capital goods clearance, if any. He pointed out to the following extract of the agreement :- "In consideration of the know-how provided by HONDA FOUNDRY under clause 3.0 of this Agreement, SHRIRAM PISTONS will pay an amount of Japanese Yen 15,000,000 (fifteen million yen) subject to applicable taxes in following manner :- (i) 1/3 within 90 days after this Agreement has been f....
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....msp;The know-how includes designs, methods, drawings, documents and other related technical information as is or may be available from and used by Honda Foundry in the manufacture and sale of the products, during the period of this Agreement : More specially this will cover - 1. Manufacturing drawings and specifications for the manufacture of the products, including specifications, of various raw materials viz. Piston alloys, etc. 2. Manufacturing drawings for manufacture of jigs/tools/dies/ gauges/cams, and other necessary engineering data for the same. 3. Manufacturing processes, including methods....
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.... gain adequate knowledge and experience of various aspects of production, quality control, etc., at SHRIRAM PISTONS request and mutual convenience. 4. Providing guidances to technical personnel for work in India to provide the necessary knowledge and support to SHRIRAM PISTONS personnel in the development of production, quality control, rejection rates, etc., at SHRIRAM PISTONS request and mutual convenience. 5. Providing advice and recommendation in the selection and procurement of machines and equipments for the products and plant and equipments layout. 6. HONDA FOUNDRY will f....
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.... three quarters of SHRIRAM PISTONS accounting year, and the payment for the last quarter within ninety days from the finalisation of the audited accounts. In case, any of the products of this agreement is patented in India, the payment of royalty/lump sum payments made by SHRIRAM PISTONS for the agreement period shall also constitute full compensation for use of patent right till the expiry of the life of the patent, and SHRIRAM PISTONS shall be free to manufacture the products even after the expiry of the agreement without making any additional payments. (b) The expenses for deputation of technicians by HONDA FOUNDRY at the rate of Japanese yen 40,000 (forty thousand yen) per day per person which i....