2015 (11) TMI 441 - SC - Customs

Valuation - Inclusion of value of technical know how fees - Held that - Court have also gone through the details of the services which were to be provided under the agreement. From the reading it becomes apparent that all these services are post-importation and, therefore, could not be added to the value of the goods imported. The matter is squarely covered by the judgment delivered by this Bench in the case of Commissioner of Customs,Ahmedabad vs. M/s. Essar Steel Ltd. 2015 (4) TMI 486 - SUPREME COURT . - Decided against Revenue.

Summary

Issues:
1. Valuation of imported goods for customs duty including Technical Know-how Agreement cost.

Analysis:
The case involved an importer who had imported components of Tractors from a manufacturer in Italy and declared the price of the goods for customs duty without including the cost of a Technical Know-how Agreement entered into with the same manufacturer. The Customs Authorities issued a show cause notice, and the demand was confirmed by the Adjudicating Authority. However, the Tribunal later deleted the cost of the Technical Know-how Agreement, stating that it cannot be considered as part of the import cost.

Upon reviewing the Technical Know-how Agreement, the Supreme Court found that the agreement outlined services to be provided post-importation, such as training, supplying technical know-how, granting the use of Intellectual Property Rights, and providing technical information and drawings. The Court concluded that these services were not part of the import value of the goods. The judgment cited a previous case, Commissioner of Customs, Ahmedabad vs. M/s. Essar Steel Ltd., to support this interpretation.

The Court's analysis focused on the nature of the services outlined in the Technical Know-how Agreement, emphasizing that they were post-importation services. As a result, the Court upheld the Tribunal's decision to exclude the cost of the agreement from the valuation of the imported goods for customs duty purposes. Consequently, the appeal was dismissed based on the findings and interpretation of the agreement's terms and the relevant legal precedent.