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TMI Blog2006 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... e and technical assistance agreement entered into between them on 24-6-1998 i.e. between the JVC and M/s. Yazaki Corporation, Japan. Under the joint venture agreement, the JVC may purchase components, materials and equipments from any source including from its collaborator. M/s. Yazaki Corporation, Japan or its affiliates upon mutually agreeable terms and conditions as per clause 2.5 of the JVC. Accordingly, certain raw materials and spares have been imported from its collaborator and its affiliates in other countries like Singapore and Belgium on the agreed terms and conditions. There is no condition in any of the agreements that the appellant is required to procure raw materials from its collaborator only. In fact, as per say of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied to importer i.e. components, raw materials and equipments. So, it is a condition of sale. Hence the lump sum fees is related to the imported goods. Regarding running royalty, the importer is not free to procure the components, raw materials and equipments from any other sources as found in the relevant portions of the agreement. Hence payment of royalty is a condition of supply of components." 4.It was submitted that the Commissioner (Appeals) has not carefully gone through the agreement in its entirety. He has merely picked up a few sentences from here and there and observed as above. His findings are inconsistent and contrary to the facts on record. As per clause 2.5 of the joint venture agreement, the appellants can make purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or manufacture of finished products, namely automotive wire harness and components thereof. Therefore, Rule 9(1)(c) of the Valuation Rules, 1988 has no application to the facts of this case. Rule 9(1)(c) provides that royalty and licence fee related to the imported goods that the appellant is required to pay, directly or indirectly, as a condition of the sale of the goods are only required to be added to the value of the imported goods to the extent that such royalty and licence fees are not included in the price actually paid or payable. In the present case, there is no such condition of sale of the goods by the collaborator and its affiliates to the appellants. Therefore, the Commissioner (Appeals) order is erroneous, wherein he has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); (viii) Mando Brake Systems India Ltd v. CC - 2004 (163) E.L.T. 333 (T); (ix) Neg Micon (India) Pvt. Ltd. v. CC - 2004 (170) E.L.T. 29 (T). 6.The ld, D.R., on the other hand, submits that though in this case, the appellants were free to buy the components indigenously and were also required to give priority to the indigenous manufacturers, but the collaborator who was supplying the technical know-how has imposed a condition that the goods should be as per their specifications and quality standards which in effect amounted to manufacture of components as per their technology and specifications and the appellants were therefore not free to obtain goods from other sources and in view of this, it can be said that the components ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are not included in the price actually paid or payable; (d) the value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller;" 8.Since the royalty is being paid on the value of the finished goods, and not on the sale proceeds of any subsequent resale of the imported goods, Rule 9(1)(d) is not attracted in the present case. 9.As regards application of Rule 9(1)(c), we note that only such royalty, payment of which is related to the imported goods and is made as a condition of sale of such goods that can be added to the declared price. In the instant case, the payment of royalty is not related to the import of component, nor to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me cannot be added to the value of the imported components, as has been consistently held by the Tribunal Larger Bench in the case of Hoerbiger India Pvt. Ltd. v. CC, Mumbai, 2003 (156) E.L.T. 62 (T); Panalfa Dongwon India Ltd. v. CC - 2003 (155) E.L.T. 287 (T); Polar Marmo Agglomerates Ltd. v. CC, Delhi - 2003 (155) E.L.T. 283 (T); S.D. Technical Service v. CC - 2003 (155) E.L.T. 274 (T) = 2003 (56) RLT 970 (T); Associated Cement Co. Ltd. v. CC - 2005 (192) E.L.T. 765 (T) = 2003 (59) RLT 574 (T); Mando Brake Systems India Ltd. v. CC - 2004 (163) E.L.T. 333 (T). Larger Bench decisions of the Tribunal have to be preferred over the decisions in the case Matsushita Television & Audio India Ltd. v. CC, New Delhi - 2001 (136) E.L.T. 1093 (Tri. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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