2019 (6) TMI 278

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....case the original adjudicating authority, vide order in original dated 05.07.2011 concluded, that the Appellants and their supplier M/s. Kostwein Machinenbau, GMBH - Austria are related in terms of Rule 2(2) of Customs Valuation Rules 2007 and that the declared invoice value for the goods imported by the Appellants from their supplier shall be accepted under Section 14 of the Customs Act, 1962 read with Rule 3(3) (a) of Customs Valuation Rules 2007. Commissioner of Customs reviewed the said order and filed an appeal before the Commissioner Appeals on the grounds that the Appellants are engaged in local manufacturer of the products of the supplier and imported goods are used in such manufacture of such goods which are sold under the trade ma....

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....es upon the following cases : (i) Commissioner of Customs v/s. Perodo India Pvt. Ltd. No.2008(224) E.L.T. 23 (S.C,) (ii) M.G.M. Entertainments Pvt. Ltd. v/s. Commissioner of Customs, Chennai No.2008(228) E.L.T. 120 (Tri - Chennai) 4. Heard both the sides and perused the records of the case. We find that the department is seeking to add technical know- how fees and royalty charges payable or paid by the Appellant to their foreign suppliers. Even the Commissioner (Appeals) was not categorical in finding that this payments are required to be included. Learned Commissioner (Appeals) relied on the Supreme Court's decision in the case of Ferodo India Pvt. Ltd. 2008(224) ELT 23 SC. He holds that the payment made towards royalty and technic....

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....ed for the manufacture of catalyst. In order to manufacture the catalyst they require many other raw materials. The technical fee in terms of the agreement with the foreign supplier is only for the manufacture of the final product. Hence it is not relatable to the imported goods. There is no clause in the agreement which says that the condition of sale of the imported product payment technical know-how fees. In fact there is no obligation to import the item imported only from the foreign supplier. As regards reference to Appendix A, the precious metal solutions are supplied by the foreign supplier as a part of Engelhard's assistance in the start-up of the facility. From this we cannot infer that payment of technical transfer know-how fee is....