9911796707
TMI Blog2007 (2) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... .1(b) of that agreement, the appellant was to pay lump sum fee not exceeding US $2 million to the foreign party. That clause may be read "ARTICLE 6. Consideration 6.1 In consideration of the rights granted and technical know-how sup plied by HMC to HMIL pursuant to this Agreement, HMIL shall make the following payments to HMC: (a) royalty as mentioned in clause 6.2 below; and (b) lump sum fee not exceeding US $2 million or as fixed by the Government of India from time to time." 2. Under the impugned order it has been held that this lump sum payment will be subject to duty by adding that amount to the imports of the appellant during the period of agreement from the Korean Company. We may read the finding :- "15. Now I will deal with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation to any imported goods, provision of Rule 9(1)(c) of Customs (Valuation) Rules, 1988 is not attracted and the findings is not sustainable at all. 4. He would also submit that the scope of 9(1)(c) had been the subject of the judgment of Hon'ble Supreme Court in the case of M/s. J.K. Corporation [ (208) E.L.T. 485 (S.C.) = 2007-TIOL-15-SC-Cus.] and it has been ruled that :- "The sole question which, therefore, arises for consideration in this appeal, is as to whether customs duty would be payable on the purchases price of the goods by adding the value of licence and technical know-how etc. to the value of the imported goods. The basic principle of levy of customs duty, in view of the afore provisions, is that the value of the importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually paid or payable for the imported goods: (a) Charges for construction, erection, assembly, maintenance or technical assistance, undertaken after importation on imported goods such as industrial plant, machinery or equipment; (b) The cost of transport after importation; (c) Duties and taxes in India." What would, therefore, be excluded for computing the assessable value for the purpose of levy of custom duty, inter alia, has clearly been stated therein, namely, any amount paid for post-importation activities. The said provision, in particular, also apply to any amount paid for post-importation technical assistance. What is necessary, therefore, is a separate identifiable amount charged for the same. On the revenue's own showing, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of learned Chief Commissioner's finding that the import of capital goods and acquisition of technical know-how by CCL from BFP constituted a single package. We have also found relation between the capital goods and the know-how fee. We have also noticed that M/s. CCL through their letter dated 2-3-2001 furnished a split-up of the know-how fee to the adjudicating authority showing the following parts as relatable to the erection of the plant and manufacture of Instant Coffee therein: (i) Detailed drawings for erection of machineries, piping, power distribution, instrumentation and utilities requirement. 50,000 USD (ii) Detailed design and drawing for manufacture in India of extractors, Spray drier tower and agglomeration acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable for the imported goods, namely (i) commissions and brokerage, except buying commissions; (ii) the cost of containers which are treated as being one for customs purposes with the goods in question; (iii) the cost of packing whether for labour or materials; (b) the value, apportioned as appropriate, of the following goods and services where supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production 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) materials, components, parts and similar items incorporated in the imported goods; (ii) tools, dies, moulds and similar items used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." This finding is contrary to the terms of agreement which mentioned new cars proposed to be introduced. There is no evidence on record to suggest that technology transfer agreement is a fraud and has been entered into only to facilitate payments under false pretext. The Commissioner's observation that an already established car company would not require infusion of new technology is contrary to the common knowledge that new automobile models or upgrading existing models is a high cost and high technology activity. Therefore, the basic premise of the impugned finding itself is faulty. 9. In view of what is stated above, impugned order is set aside and appeal is allowed with consequential relief, if any, to the appellants. (Pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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