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Issues:
- Inclusion of technical know-how fee in the assessable value of imported goods under Rule 9(1)(c) read with Rule 4(1) of the Customs Valuation Rules. Analysis: The case involved an appeal against an Order-in-Appeal passed by the Commissioner of Customs (Appeals) following a remand order by CEGAT. The dispute centered around whether the technical know-how fee paid by the appellants to a foreign supplier should be included in the assessable value of imported goods. The appellants, a joint venture, had entered into a technical license agreement with a foreign entity for the production of air-conditioners and radiators. The Commissioner held that the fee is includible in the assessable value, a decision challenged by the appellants. The appellants argued that the fee should not be added to the transaction value of the imported goods as it was not related to the imported goods nor a condition for their sale. They relied on various decisions to support their stance. The technical assistance fee was paid for the supply of technical information related to the manufacture of contract products, specifically air-conditioners and radiators. The Tribunal noted that the technical information was solely related to the contract products and not the imported goods themselves. Therefore, the lump sum payment could not be added to the assessable value under Rule 9(1)(c) of the Customs Valuation Rules as the necessary conditions were not met. In conclusion, the Tribunal found that the payment of the technical license fee was not a condition for the sale of the imported goods and was not related to them. As per the contract terms, the fee was specifically for technical information related to the contract products, i.e., air-conditioners and radiators. Therefore, the Tribunal allowed the appeal, setting aside the Order-in-Appeal and providing consequential relief to the appellants.
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