2006 (7) TMI 722

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....joint venture agreement under which manufacture, marketing, distribution and sales licence was to be undertaken. The licensed products were defined under that Agreement as follows: LICENSED PRODUCTS shall mean such industrial sewing threads, twines and braids and related products as are manufactured by BVTL in accordance with the know-how and technology licensed by BARBOUR to BVTL from time to time under the Technical Collaboration to be executed by and between BARBOUR AND BVTL. A list of LICENSED PRODUCTS is attached hereto as Attachment and made part of this AGREEMENT. The list of licensed products attached to this Agreement admittedly did not contain any machinery. The consideration Clause 6.1(a) of the Agreement, inter....

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....ow and argued that in the very nature of things and in the context of Joint Venture Agreement, the machineries which were imported could not have functioned without the disclosure of the know-how and, therefore, the fees which were payable under the know-how Agreement as a lump sump amount were attributable to the import of machinery and ought to be computed along with the price of the machinery for the purpose of imposition of the Customs duty. The learned authorized representative very fairly submitted that the Tribunal in Barbour Vardaman Thread Ltd. v. Commissioner of Customs, Delhi reported in 2004 (177) ELT 966 (Tri.-Del.) of the same appellant had set aside a similar order of the Commissioner (Appeals) on this issue. 5. On going t....

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....plant. The licensed products in respect of which foreign collaborator supplied the Technical know-how as stated in the Agreement did not specify machinery. From the terms of the Agreement, it is not possible to infer that any amount of consideration contemplated in Article 6, was for the machinery which was imported. 5.1 The Tribunal in the appellant's own case reported in 2004 (177) ELT 966 (Tri.-Del.), in the background of identical facts on the issue under consideration before us, held in paragraph 6 as under: 6. Rule 9 of the Customs Valuation Rules provides that for the purpose of determining the transaction value, cost of royalties and license fee relating to the imported goods that the buyer is required to pa....