2016 (8) TMI 180 - AT - Customs

Valuation - related persons - Special Valuation Scheme - addition of technical information and knowhow fee of USD 2.1 lakhs paid by the appellant to the exporter - Held that - We are unable to appreciate summary conclusion based on assumption. It is the case of the appellant that they have provided all the material record in support of their plea. However, we find the same was not recorded and the appellant s failure to furnish the record has been concluded as reason for rejecting the appeal. - Matter remanded back.

Summary

Issues Involved:
- Liability for additional duty due to loading of transaction value with technical information and know-how fee.

Analysis:
The appeal in this case is against the order passed by the Commissioner of Customs (Appeals) concerning the liability of the appellant for additional duty related to a technical-knowhow fee paid to an exporter. The appellant had entered into an agreement with a company for the manufacture of licensed products and imported certain items necessary for manufacturing. The original authority concluded that the technical-knowhow fee should be added to the transaction value. The appellant contended that the fee was not a condition for import and there was no direct link between the fee and the import transaction. The appellate authority, however, upheld the original finding without detailed reasoning, stating that the fee was contingent upon the import of raw materials. The Tribunal found the conclusions to be based on assumptions and lack of detailed examination of documents provided by the appellant. The Tribunal observed that the matter needs to be re-examined by the original authority to determine the applicability of the Customs Valuation Rules to the case. The appellant was directed to submit all necessary documents and present their case, with a mandate for the original authority to decide within three months. The appeal was allowed for remand, emphasizing the need for a reasoned order based on thorough examination of evidence.

In summary, the main issue revolved around the liability of the appellant for additional duty based on the inclusion of a technical-knowhow fee in the transaction value. The Tribunal found the original and appellate authorities' conclusions lacking in detailed reasoning and based on assumptions rather than concrete evidence. As a result, the Tribunal remanded the case back to the original authority for a fresh examination of the facts and a reasoned decision based on the provided documents. The appellant was instructed to submit all necessary materials, and the original authority was directed to decide the matter promptly within three months. The appeal was allowed for remand, highlighting the importance of a thorough and evidence-based assessment in determining the liability for additional duty in such cases.