9911796707
TMI Blog2004 (2) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... stered a case for investigation of relationship under Rule 2(2) of Customs Valuation Rules 1988. The foreign company is having 90% of total equity capital in the Indian Company and Importer is having a Technical collaboration with overseas supplier and engaged in local manufacture of some of the product of foreign supplier. The Indian Company is importing components from the foreign supplier for the local assembly for manufacture. 3. By virtue of Technical Collaboration Agreement, the Indian company is required to pay the know-how fees and royalty to produce the licenced product and also use the word, manufactured under MMC Technology . As per agreement a lump-sum fee amounting US $ 1,00,000 is payable in three equal installments and run ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s they are processed/ manufactured in accordance with the manufacturing process contained in the technical information supplied by the collaborator. To achieve their objective, the importer has to pay not only price of the goods but also fees for obtaining technical know-how and licence and the right to exclusive use of the same. 3. that as per Article 15-I of Joint Venture Agreement, the Indian Company shall purchase all equipments, parts and raw materials need for manufacture of licenced products from the foreign collaborator. It can be seen that import of such goods started after signing of the collaboration agreement wherein payment of technical know-how and royalty is a condition of the agreement. 8. The Department relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... components that go into the manufacture of the licenced products and capital goods which are required for the manufacture of the licenced products. Thus the payment of licence fees is not related to the imported goods but is related to the knowledge for manufacture of the finished final products from out of parts/components. (v) That the royalty and licence fee is not a condition for the sale of parts/components. The purchase will be made only if the conditions are competitive. Hence the lump-sum fees of US$ 1,00,000/- is not a condition for supply of parts and components and therefore it can not be added to the value of the imported goods even in terms of Rule 9(1)(c). 10. The respondent relied upon following case laws : (a) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction and sale for export of imported goods, to the extent that such value has not been included in the price actually paid or payable, namely :- (i) material, components, parts and similar items incorporated in the imported goods; (ii) tools, dies, moulds and similar items used in the production of the imported goods; (iii) materials consumed in the production of the imported goods; (iv) engineering, development, art work, design work and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods. 13. It is clear that Rule 9(1)(b) is attracted in a case where certain goods/services, are supplied by the buyer free of charge or at a reduced cost for use in conn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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