2001 (10) TMI 222 - AT - Customs

Summary

Issues involved: Whether technical know-how is includible in the assessable value of goods imported.

Summary:
The appeal was filed by M/s. Otto India Private Ltd. regarding the inclusion of technical know-how in the assessable value of imported goods. The Appellants entered into a turnkey contract with M/s. Steel Authority of India for a project involving the import of specific equipment and spares. The Appellants argued that the import was based on a commercial transaction and not conditional on the technical know-how. The Revenue contended that the cost of technical know-how should be included in the assessable value.

Upon review, it was found that the participation of M/s. HWIL in the project was indeed based on technical know-how from their collaborators in Germany. The Appellants acknowledged the necessity of purchasing machinery and equipment to guarantee the plant's performance, as required by the project contract. Statements from individuals involved confirmed the importance of technical know-how in obtaining the contract. The Customs Valuation Rules state that the value of goods and services necessary for production should be added to the transaction value. Therefore, the Tribunal upheld the decision to include the cost of technical know-how in the assessable value of the imported goods, rejecting the appeal.