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Issues:
Inclusion of technical licence fee and royalty in the value of imported machinery and raw materials. Analysis: The case involved a dispute regarding the inclusion of technical licence fee and royalty in the value of imported goods. The appellant argued that these amounts were not related to the imported goods and were not a condition of sale. The respondent conceded that the entire amounts of technical know-how and royalty should not be included but stated that part of the technical licence fee should be added to the assessable value as it related to the imported goods. The Tribunal referred to a Supreme Court decision which clarified that such payments should only be included if they were a condition pre-requisite for the supply of the imported goods. The Tribunal noted that there was no finding in the impugned order regarding these payments being a condition of sale. Therefore, based on the Supreme Court decision and the lack of evidence supporting the inclusion of these payments as a condition of sale, the impugned order was set aside, and the appeal was allowed. In conclusion, the Tribunal emphasized the importance of establishing a direct nexus between the technical licence fee and royalty payments and the imported goods to justify their inclusion in the value of the imported goods. The decision highlighted the need for clear evidence demonstrating that such payments were a condition pre-requisite for the supply of the imported goods. The judgment underscored the significance of examining the pricing arrangement between the buyer and the foreign collaborator to determine the appropriateness of including technical know-how costs in the price of imported goods.
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