2001 (4) TMI 239 - Commissioner - Customs

Summary

Issues:
1. Determination of assessable value under Rule 8 of CVR '88 by adding technology transfer fee.
2. Relatedness of the appellant with another company as per Rule 2(2)(i) & (vi) of CVR '88.
3. Justification of adding technology transfer fee to the transaction value under Rule 9(1)(b)(iv) of CVR '88.
4. Violation of principles of natural justice by deciding the case ex parte.

Analysis:
1. The appeal was filed against an Order-in-Original that added a technology transfer fee to the transaction value under Rule 9(1)(b)(iv) of CVR '88. The appellant argued that the fee was not related to the imported goods and should not be included. The lower authority held that the appellant and the supplier were related under Rule 2(2)(i) & (vi) of CVR '88, influencing the transaction value. The judge found that the fee was not associated with the import of the goods, thus the addition was deemed incorrect.

2. The appellant contended that their company was affiliated with entities in Israel and the USA, entering into agreements for technology transfer. The lower authority considered the relationship between the appellant and the supplier, concluding they were related as per CVR '88 rules. However, the judge noted that the technology transfer fee was not connected to the imported goods, leading to the appeal being allowed and the original order set aside.

3. The lower authority justified adding the technology transfer fee to the transaction value based on various decisions. However, the judge found that the fee was for know-how related to agricultural development, not the imported goods. The agreement did not indicate a connection between the fee and the goods, making the addition under Rule 9(1)(b)(iv) inappropriate. The judge emphasized that the fee was not for goods imported, rendering the lower authority's decision unjustifiable.

4. The appellant raised concerns about the violation of natural justice principles, stating they were not given a fair opportunity to defend their case. The judge acknowledged the appellant's submissions during the personal hearing and found that the lower authority's decision, based on incorrect assumptions about the imported goods and technology transfer fee, was not maintainable. Consequently, the appeal was allowed, and the original order was set aside.