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Issues: Valuation of machinery imported, Addability of fees paid, Inclusion of various charges in assessable value
Valuation of Machinery Imported: The dispute revolved around the valuation of machinery imported by the respondents. The Asstt. Commissioner added the value of documentation and know-how fee to the declared price of the machinery. The Collector (Appeals) upheld the addition of a sum but noted that certain fees were not addable to the assessable value. The Collector accepted a specific amount for supply of documents and services based on the Collaboration Agreement between the parties. The issue centered on whether the entire quantum of fees paid should be added to the valuation. Addability of Fees Paid: The judgment referred to the case of CC v. Essar Gujarat Ltd., where the Supreme Court had observed that fees for technical know-how are essential for making a plant functional and should be added to the valuation. Based on this finding, a specific amount was deemed addable. The judgment analyzed various articles of the Collaboration Agreement to determine the addability of different charges paid by the importer. Fees related to know-how and documentation, training of staff, commissioning of the plant, conducting tests, and setting up an R&D facility were assessed for their inclusion in the assessable value. Inclusion of Various Charges in Assessable Value: The judgment delved into specific articles of the Collaboration Agreement to ascertain the includibility of charges paid by the importer. Charges related to supply of know-how and documentation, deputation of personnel for training and commissioning, conducting tests, supplying information on improvements, setting up an R&D facility, and guarantee of know-how were scrutinized. The judgment concluded that fees allocated to certain articles were includible in the assessable value, while charges related to other articles were deemed non-addable. The order set aside the Commissioner's decision regarding certain fees and dismissed the appeal concerning other charges. In summary, the judgment addressed the valuation of imported machinery, the addability of fees paid, and the inclusion of various charges in the assessable value. It analyzed the Collaboration Agreement between the parties to determine the admissibility of different fees based on legal precedents and specific provisions. The decision provided a detailed assessment of each article of the agreement to establish the charges that should be included in the valuation of the plant, setting aside certain aspects while dismissing others.
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