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TMI Blog2004 (2) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% under the know-how Agreement the Loctite Corporation, U.S.A. agreed to provide data, documentation drawings and specification relating to invention, design formula, process and similar property for manufacture of engineering adhesive and sealant and assistance as may be needed by Loctite India from time to time during currency of know-how agreement for operation of facilities for manufacture of the products which constituted operation Know-how . The Know-how Agreement did not provide for supply of raw materials and did not cast any obligation on Loctite India to purchase the same from Loctite Corporation, U.S.A. only. The agreement provided for payment of a lump-sum of US$ 2,75,000 in three instalments and also payment of royalty equa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the invoice may be accepted under Rule 4 of the Customs Valuation Rules, 1988. 5. The department filed an appeal against the order-in-original and submitted the following points in the grounds of appeal (1) The adjudicating authority while accepting the transaction value has ignored the fact that it is mandatory to make adjustment with regard to includibility of royalty and Technical Know-how in terms of Rules 1988. (2) The Indian company is importing raw materials from their foreign collaborator. It can be seen that royalty and know-how fees is payable towards the Know-how licence, Technical information under the agreement. The said Technical Know-how and information shall be used to process the imported goods for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epression of price thereof. The published international price list of the principal and the import prices of the subsidiary as per the price list, are without any consideration or commission or special consideration. It proves that the price is not influenced by their relationship. Also, no payment is made towards the transfer of know-how. I have also perused the recent case law of M/s. Balsara Extrusions [2004 (163) E.L.T. 187 (Tri.)] applies to the facts and circumstances of the present case. The prices of the goods, imported and supplied are at arms length. No evidence has been laid to show that payment of fees and royalty included any extra commercial reduction in the import price. There is no merit in stating that the parties are not i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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