2008 (11) TMI 208

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....s a manufacturer of catalytic converter for automobile and they entered into a cooperation agreement dated 25-5-95 with the supplier in Finland M/s. Kemira Metalkat Oy; in pursuance of the said agreement the supplier in Finland has invested to the tune of 15.13 per cent on the equity of the appellant company; the supplier has agreed to procure the capital goods and equipments required for setting up the plant by the appellant; the agreement also envisage that the Finland party undertakes certain services including commissioning and errection of the capital goods and equipments in the plant of the appellant in India, providing training to personnel, providing technical know-how for the manufacture of final product namely, catalytic converter....

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....be paid. 4. Learned Advocate made following submissions:- (a) The payment of 2 lakhs US$ was not towards purchase of raw materials. It is only towards supply of know-how for the manufacture of final product by the appellant company which was set up with the help of the supplier company. The fact that the supplier company invested 15.13 per cent of equity cannot be considered as the ground for holding that the appellant and supplier are related persons and for the said proposition he relied upon the decisions of the Hon'ble Supreme Court in the case of CCE, Mumbai v. Fisher Rosemount (India) Ltd., reported in 2001 (134) E.L.T. 321 (S.C.) , in the case of Mirah Exports Pvt. Ltd. v. Collector of Customs, reported in 1998 (98) E.L.T. 3 (S....

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....ay with and interest of one of them in the other is sufficient to establish relationship. 6.1 We have carefully considered the submissions from both sides. At the out set we find that the appellant is not a trader-importer. They are manufacturer of sophisticated automobile components. For the said purpose they have entered into a cooperation agreement with the Finland based company for get ting investment, procuring capital goods, assisting in setting up the plant, providing technical know-how for manufacture of final products. The raw material supply is only one of the aspects of said agreement. 6.2 The decision of the Hon'ble Supreme Court in the case of Fisher Rosemount (India) Ltd. (supra) supports the view that mere shareholding ....