9911796707
TMI Blog2001 (12) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... rom M/s. Fuji Photo Film. Certain sub-clauses of Article 7 of the contract which we read below, have given room for the present dispute about the valuation of photographic film machine. 1. As per Article 7.02 Fuji shall not charge any licence fee related to the know-how embodied in the machines as long as Bhimtal continues to purchase semi-processed products exclusively from Fuji; 2. As per Article 7.03 in the event that Bhimtal starts to purchase semi-processed raw materials from supplier other than Fuji, the importer shall pay a flat annual licence fee of JY 1,00,000 in consideration of the know-how embodied in the machines upon demand by Fuji. 2. The lower authority took the view that the declared value for the photofilm machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the foreign supplier has not charged the appellant any licence fee related to the know-how embodied in the machine and that this payment has been waived because of the obligation to import semi-processed raw material and in the event of failure to import the raw material the amount payable towards licence fee would be one million yen per year the period for which payment is required to be made is seven years. He submitted that it was clear that indirect payment towards the licence fee was being made while importing the raw materials. Further, the value of the obligation to import raw material towards the licence fee remained quantified at one million per year for seven years. Therefore, he submitted that the Customs authorities were en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consideration for not charging the cost of licence fee related to know-how. The value of this consideration also remains computed at one million yen per year for seven years. Therefore, the appellants indirectly paid @ one million yen per year for seven years towards licence fee of the know-how embodied in the machine. The goods are to be assessed to customs duty at the price at which such goods are ordinarily sold and where the price is the sole consideration for sale. In the present case, price was not the sole consideration for the sale; but the purchase of raw materials exclusively for seven years too constituted consideration. It is, therefore, necessary in terms of Customs Valuation Rules that the money value of the additional consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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