TaxTMI 
TaxTMI 
2005 (4) TMI 203
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....ibution of the products. Royalty is payable by the respondent in terms of Para 7.5 of the licensing and the technical assistance agreement. The Commissioner (Appeals) has in his findings succinctly held as follows : "Royalty of 5% is payable as per clause 7.5 of the Licensing and Technical Assistance Agreement. The Royalties are to cover both electric fencing Technical Know-how and assistance for product manufacture, plus payment for services rendered in India, both technical and marketing and the Royalty is equal to 5% of the selling price to an independent purchaser. As such, it is seen that the Royalty payable has nothing to do with the components, etc., imported nor has it been shown that the Royalty payable is a condition of sale of the imported goods. Therefore, inclusion of Royalty under Rule 9(1)(c) of the Customs Valuation Rules, 1988 is nor maintainable. Accordingly, the appeal is allowed with consequential benefits, if any." 2. Aggrieved over the Commissioner's finding Revenue has filed this appeal. 3. Smt. Shobha L. Chary, learned JCDR appeared for the Revenue and Shri G. Shivadass, learned Advocate appeared for the Respondents. 4. The learned JCDR took us t....
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....43 (Tri.-Del.) 2. TATA Timken Ltd. v. CC, Calcutta - 2001 (127) E.L.T. 772 (Tri.-Cal.) 3. Living Media India Ltd. v. CC, New Delhi - 2002 (148) E.L.T. 441 (Tri.-Del.) 4. Polar Marmo Agglomerates Ltd. v. CC - 2003 (155) E.L.T. 283 (Tri.-Del) 5. Panalfa Dongwon India Ltd. v. CC, Mumbai - 2003 (155) E.L.T. 287 (Tri.-LB) 6. Hoerbiger India Pvt. Ltd. v. CC, Mumbai - 2003 (156) E.L.T. 62 (Tri.-LB) 7. MDS Switchgear Ltd. v. CC, Mumbai - 2003 (151) E.L.T. 421 (Tri.-Mum.) 8. Himson Textiles Engg. Industries Ltd. v. CC - 2000 (117) E.L.T. 535 (S.C.) 9. UOI v. Mahindra & Mahindra Ltd. - 1995 (76) E.L.T. 481 (S.C.) 7. We have gone through the records of the case carefully. According to Rule (9)(1)(c), in determining the transaction value there shall be added to a price actually paid or payable for the imported goods, - royalti....
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.... condition. In our view the above decision of the Tribunal cannot be made applicable to the present case without our going through the entire agreement pertaining to in the above case. Moreover we want to make it clear, as per Rule 9(1)(c) what we have to see is whether payment of royalty is a condition of sale of the goods to be valued. The converse proposition namely, that Technical Know-how will be given only if goods are imported from the foreign supplier may not be relevant as far as this rule is concerned. In other words, suppose in the agreement there is a condition that for supply of Technical Know-how the party has necessarily to import from the foreign suppliers then such a condition cannot be interpreted in such a manner as to add royalty/licence fee to the Assessable value in terms of Rule 9(1)(c) of the Customs Valuation Rules, 1988. Even though the learned JCDR argued strenuously that the payment of royalty in this case is a condition of sale we are not inclined to agree with her for the reasons already stated. Hence, Revenue's appeal is rejected. (2) C/34/03 : Buhler (I) Ltd. v. CC, Bangalore : 11. The appellant has appealed against the OIA, dated 31-12-2002 pa....
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....sp; Collector of Customs v. Modi Xerox Ltd. - 1990 (48) E.L.T. 141 (T) 5. S.D. Technical Services v. CC, New Delhi - [2003 (155) E.L.T. 274 (Tribunal-LB) = 2003 (56) RLT 970 (LB)] 14. The learned JCDR reiterated the Order-in-Appeal. 15. We have gone through the records of the case. The reasoning of the appellate authority that without the use of Technical Know-how the imported goods could not have been assembled into licensed products and hence the Technical Know-how fee is includible in the assessable value is not in conformity with Rule 9(1)(c) of the Customs Valuation Rules, 1988. In the present case Technical Know-how fee is payable only for the Technical Know-how for the licensed products which have been mentioned earlier. The Technical Know-how fee is not relatable to the imported goods. It is very clear that the payment of Technical Know-how fee is not a condition of sale of the imported goods, which are only components. Moreover the case law relied on by the learned Advocate are squarely applicable to the present case. Hence we allow the appeal with consequential relief. (3) C/52/03 : Hensel (I) Ltd. v. CC, Chennai....
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....rther she reiterated the findings of the Commissioner (Appeals). 20. We have gone through the records of the case carefully. The Commissioner (Appeals) has given a finding that TECHNICAL KNOW-HOW is for production of end products from the imported components/spare parts. From this it is very clear that payment of TECHNICAL KNOW-HOW fee is not a condition of sale of the goods to be valued. We cannot accept her finding that a TECHNICAL KNOW-HOW fee is addable to the value of the imported goods as without the Technical Know-how, the imported material would not have been put to use in the form of the end product. Hence, we allow the appeal with consequential relief. (4) C/271/03 : Featherlite Products : 21. This is an appeal filed against the OIA, dated 30-5-2003 passed by the Commissioner of Customs (Appeals), Chennai. 22. Shri K.K. Varier, learned Consultant and JCDR for the revenue. 23. The learned Consultant urged the following points : The appellants are carrying on the business of manufacture of different types of furniture. They entered into a technical know-how agreement with M/s. Schukra Geratebau Wilhem, Austria for manufacture and sale of mechanisms for fur....