TaxTMI 
TaxTMI 
2019 (2) TMI 889
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....or coating of Tungsten Carbide insert, tips etc. from M/s Plansee Tizit, Gmbh, Austria and filed Bill of Entry No. 1405 dated 20/05/1999 at Kolkata Sea-port. Since the import took place from an exporter who was related to the Respondent, the valuation of such goods was scrutinized by the Special Valuation Branch (SVB), Custom House, Kolkata. The SVB noticed that the respondent had entered into a Technical Collaboration Agreement (TCC) with the supplier of the goods in Austria. As per the terms of this agreement, the respondent paid a sum of Rs. US $ 2 million to M/s. Plansee Tizit. After investigation, the Department felt that this fee, which was paid for Technical Assistance, was liable to be included in the assessable value of the importe....
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....th the TCC. Unless the coating Plant is imported from the foreign principal, the respondent will not be in a position to utilize the technical knowhow for the manufacture of goods in India. 4. The Ld. CA on behalf of the Respondent, justified the order passed by the Commissioner (Appeals). He specifically argued: (i) That the Rule 9(1)(c) of the Customs Valuation Rules (determination of price of imported goods) Rules, 1998 provides for loading of the Transaction value subject to fulfilling both the following conditions being specified. (a) The amounts paid to the foreign supplier are related to the imported goods and (b) This amount is payable as a condition for sale of the good being valued. (ii) After elaborately taking us ....
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....ical Collaboration Agreement dated 28/6/1994. As per the terms of the TCC, the Respondent would be entitled to receive the Technical Knowhow in the form of designs, drawings, standards, specifications and other technical data. Such knowhow was to be used for the manufacture of goods in the respondent's manufacturing facility. The agreement makes it clear that the Respondent was required to pay an amount of US $ 2 million, in installments, as specified in the said TCC. The question to be decided is whether the amount of two million dollars is to be added to the transaction value of the coating plant which has been imported from M/s. Plansee, Austria. In this connection, we are guided by Rule 9 (1)(c) of the Customs Valuation Rules. In terms ....
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....in particular article 6, it is clear that the agreement has been entered into to provide the knowhow and technical assistance in relation to the manufacture of products in the factory of the respondent. The amount of US $ 2 million has been paid for providing such knowhow and technical assistance. After careful review of the Article 6 along with other clauses of the agreement, we are led to the conclusion that by no stretch of imagination can it be concluded that the payment of US$2 million was a condition for the sale of the coating plant by the supplier to the Respondent. Since the one of the main conditions specified in Rule 9 (1) (c) of the Customs Valuation Rules, 1988 is not satisfied, we find no justification for addition of the said....
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....ired to pay the fees as a condition of the sale of the goods imported by him. In all the decisions of the Larger Bench of the Tribunal, relied upon by the learned Advocate, we observe that the Larger Bench has, after going through the terms of the Agreement, concluded that the know-how relates to manufacture of the licensed equipment and had no relation whatsoever to the goods imported. In the present matter also, a perusal of the "License and Technical Assistance Agreement" reveals that M/s. Mitsubishi had granted to Hindustan Motors Ltd. a license to use the technical Assistant and the patents solely for assembling and manufacturing the licensed product and the conditions of payment of consideration (Yen 451,220,000) would be in three ins....