9911796707
TMI Blog1996 (9) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... n concerns, namely, M/s. Bendix USA (31-12-1983), M/s. Bendix France (11-6-1984) and M/s. Nippon Air Brake Co., Japan (21-5-1984) for technical know-how use of patent and assistance for the manufacture of Brake Systems, Spring Brakes, Master Clyinders, parts and components thereof agreeing to pay lump sum royalty in three instalments for technical in- formation and royalty of an amount equal to 5% of net ex-factory sales price of all products and parts thereof manufactured by appellants and sold for licence to manufacture such products and parts thereof and for rendering technical assistance. The appellants were importing various components and spares of the products from the foreign concerns. After receiving various records and information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Section 14(1)(b) of the Act. 3. On the basis of the above findings, the Assistant Collector ordered as follows :- (1) The invoice value of Components imported by the appellants from Nippon Air Brake Co. Ltd., Japan and their associate companies and Bendix France will be loaded by 1.5%. (2) The percentage of loading shall be 4 in the case of components imported by the appellants from Bendix USA. (3) The invoice value of capital goods imported will be assessed under Section 14(1)(b) of the Act, subject to usual check, scrutiny and verification of contemporary prices. (4) The invoice value of spares will be assessed on the basis of prices mentioned in the spares price list. If spares are imported on quotation basis and spares pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d components and the cost of standard bought-out components as consideration for the licence, technical assistance and use of patent right. 5. In Eicher Motors Ltd. v. Collector of Customs - 1994 (74) E.L.T. 357, the Tribunal considered a collaboration agreement, which besides containing the provisions contained in the present appellants collaboration agreement with Bendix USA, (except the foreign concern held 15% shares in the Joint Venture), also stipulated that the foreign concern had right to nominate two Directors on the Board of Directors of the Joint Venture. Relying on Collector of Customs v. Maruti Udyog Ltd. - 1987 (28) E.L.T. 390 and Union of India v. Atic Industries - 1984 (17) E.L.T. 325, the Tribunal held that the foreign co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of consideration shown in the agreement; the terms and conditions are not out of the ordinary or unusual so as to call for an inference of special commercial relationship depressing the price of goods supplied to the appellants by the foreign concern. The agreement does not insist that the appellants can use only components or parts manufactured by the foreign concern. Royalty for grant of licence and technical assistance is 5% of appellants net ex-factory price of all products and parts thereof sold for use within India and for export outside India. Net ex-Factory Sales price has been defined in the agreement as meaning the price of the products and parts thereof excluding the excise duties, the value of Standard Bought-Out Compone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... almost similar to those of the agreement with Bendix USA. There is one difference in that unlike Bendix USA, the other two foreign concerns do not have any equity participation in appellants-company. Nor is there any material to show that the appellants have any interest in the business of the two foreign concerns. There is nothing to indicate flow of additional consideration for the imported components or to indicate that price was not the sole consideration. The Department has not marshalled evidence of contemporaneous imports of components at higher prices. In these circumstances, there was no justification to place the burden on the appellants to prove contemporaneous imports at comparable prices. The impugned orders do not state that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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