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TMI Blog2007 (10) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Agreement was entered into between Dagger-Forst Tool Ltd (herein after referred to as DFTL) a company incorporated under the Companies Act 1956 and M/s Kinglor SrL, Italy (hereinafter referred to as Kinglor) on their own behalf as well as on behalf of M/s. Fonderia Perucchini, Italy under which Kinglor agreed to provide to DFTL and or its associates, the process and technical know-how and other advisory services required for enabling DFTL to set up a plant for manufacture of precision castings. As per the agreement it was decided that KINGLOR would, if required by DFTL, arrange for supply of plant & machinery and equipments at a price to be mutually decided by both the parties. DFTL entered into negotiation with Kinglor for purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed by way of remand by the Tribunal vide Order. No. A/102/WZB/05-C.I dated 29-8-05 for fresh decision. The case was re-adjudicated by the Dy. Commissioner who held that BPL and the supplier were related inasmuch as the supplier held 26.69% equity and 10.26% equity in BPL and further held that the supplier had undertaken to provide detailed engineering and design of equipment which was to be supplied by the foreign company and therefore, the value of such detailed engineering and design of equipment was required to be included in the invoice value. The lower appellate authority upheld the Order of the Dy. Commissioner holding that such value is required to be added in terms of Rule 9(1) of the Customs Valuation Rules, 1988. Hence this appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to complete the project so that DFTL are in a position to estimate the total costs and delivery schedules for all plant, machinery and equipment to be procured from Italy and in India. KINGLOR shall also prepare the layout of the plant, machinery, buildings and other facilities as also the process including specifications and quantities of raw materials and other facilities required for the process. All these information will be given in the final feasibility report to be provided to DFTL within 4 weeks from the effective date of the agreement; (ii) KINGLOR shall provide to DFTL detailed information of design and load date for various buildings, foundations etc. within a period of 6 weeks and drawings for installation of within a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical know-how in relation to the imported goods and is also pre-condition for the sale of the impugned capital goods However, going by all the above clauses, we are of the view that the technical know-how agreement entered into with the over-seas supplier was for supply of technical know-how for the manufacture of precision castings of the appellants in India and had no relation with the capital goods being imported. Clause 2.1.1 of the Technical Collaboration Agreement provides that the foreign supplier will provide to the appellants the lay out of the plant & machinery and equipment for the foundry and specifications and designs on the basis of which plant & machinery and equipment etc. will be installed. In other words the designs to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted, is also required to be accepted for the reason that it is clear from clause 4.2.1 of the technical collaboration agreement that the foreign supplier would arrange to supply plant & machinery and equipments only if the appellants required, which would mean that the appellants were free to procure capital goods required for setting up of its plant in India from any other supplier either in India or abroad The contention of the ld. SDR that payment of fee was a condition of sale of the imported capital goods for the reason that the foreign supplier ensured that the precision casting is to be produced in India would be of internationally acceptable quality and the appellants therefore, could not have purchased the capital goods from any o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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