2008 (9) TMI 165 - AT - Customs

Technical know-how fee paid by importer to supplier - Revenue plea is for addition of the technical know-how fee to the transaction value of the goods under Rule 9(l)(c) of the Customs Valuation Rules, 1988 and not under Rule 9(l)(b)(iv) - payment had no relation to the imported goods - moreover, the payment was not a condition for the sale of the goods to the importer - Rule 9(l)(c) is not applicable - aforesaid fee was not liable to be added to T.V of the goods revenue appeal dismissed

Summary

Issues:
1. Inclusion of technical know-how fee in the assessable value of imported goods under Customs Valuation Rules, 1988.

Analysis:
The case involved the importation of 'Nuosyn Manganese' by the respondents from a supplier in the UK. The Special Valuation Branch (SVB) conducted investigations into the relationship between the importer and the supplier. The Deputy Commissioner of Customs (SVB) determined that the importer was related to the supplier and that the technical know-how fee paid by the importer was to be added to the transaction value of the goods under Rule 9(1)(b)(iv) of the Customs Valuation Rules, 1988. The party then appealed to the Commissioner (Appeals), who allowed the appeal, stating that the technical know-how fee was not related to the imported goods and thus should not be included in the transaction value.

Upon further appeal, the Appellate Tribunal considered the Revenue's argument for adding the technical know-how fee under Rule 9(1)(c) of the Customs Valuation Rules, 1988, instead of Rule 9(1)(b)(iv) as done by the original authority. The Tribunal found that the conditions for invoking Rule 9(1)(c) were not met in this case. The technical know-how fee was paid for assistance in manufacturing wax oxidates in India, not directly related to the imported goods. The payment was not a condition for the sale of goods to the importer, as per the agreement between the parties. The Tribunal dismissed the Revenue's appeal, citing precedents to support their decision.

In conclusion, the Tribunal held that the technical know-how fee was not liable to be added to the transaction value of the imported goods. The decision was based on the lack of conditions for applying Rule 9(1)(c) and the fee's unrelated nature to the imported goods, as established by the agreement between the importer and the supplier. The Tribunal's decision was in line with previous judgments and was pronounced on 2-9-2008.