9911796707
TMI Blog2016 (9) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... cated in Malaysia. In terms of the undertaken given by the manufacturer, the manufacturer undertook the following: "1. Our company will (a) use the trademarks only on the goods and not on any other goods; (b) affix the Trademarks only to the precise quantity of goods required to fill the order received from M/s.Cravatex Ltd. (the licensee) or its representative; and (c) sell the goods only to the licensee. 2. Our company has on right to (a) use the Trademarks on any goods other than those ordered by the licensee or (b) to sell the goods to any person other than the licensee. Our company will not display goods or refer to the goods in any advertising or promotional materials or activities. 3. Our company will comply with all of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and information available with the foreign company relating to design, marketing, sourcing, production and retail developments of contract products as well as information relating to materials used in the manufacture thereof. The contract also provides as follows: Article 2 Technical assistance to be rendered by the foreign company The scope of technical assistance to be rendered by the Foreign Company will cover the following: a) To assist the Indian company to design, manufacture, source, assemble, sell, distribute, use and service the contract products. Article 3 Transmission of technical information 3.01 During the term of this agreement, the foreign company shall transmit to the Indian company the technical information an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the address (es) specified by the foreign company. Within thirty calendar days of receipt of the samples, the foreign company will notify the Indian company in writing of the foreign company s approval or disapproval of the licensed product and will mark its approval upon and will return to the Indian company, one of the samples. If the foreign company does not provide written disapproval of the licensed product within such thirty day period the licensed product shall be deemed approved. The Indian company will not under any circumstances, use the trademarks on any product not approved by the foreign company in advance in accordance with this article. In case of any dispute over any product, the Indian company will not use the trademar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he foreign vendor. Before placing orders to foreign manufacturer the appellant would select the model of the footwear from the catalogue of the foreign collaborator. The said catalogue contains the pictures of the footwear from different angles and also indicate whether it is made of rubber or leather. The appellant selects a particular model of the footwear from the catalogue. Thereafter the foreign collaborator sends a shoe of that model (not in pair) to the appellant and does not charge anything for the same. The said samples is sent by the appellant to the vendor abroad along with catalogue of the shoe. The foreign vendor thereafter manufactures shoe as per the specimen. The said shoes manufactured by the foreign vendor, thereafter is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collaborator and the shoes manufactured by the vendor needs to be approved by not only the appellants but also the foreign collaborator. He relied on the decision of the Hon'ble Supreme Court in the case of Andhra Petrochemicals 1997 (90) ELT 275 (SC). The learned AR also relied on the interpretative notes to the Customs Valuation Rules. 4. We have gone through the rival submissions. We find that the foreign collaborator is the owner of the brand named and of the technical details of the shoes imported by the appellant. The appellant had entered into an agreement with the foreign collaborator for manufacture of shoes as per the specification of the foreign collaborator in terms of the collaboration agreement. The foreign collaborator has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rategy, etc. listed in the agreement. He has further argued that the lump sum amount has been revised from US $ 6.00lakhs to US $ 5.00 lakhs. He has argued that in view of the above only a portion of the lump sum amount can be attributed to the cost of design of the imported goods. We find substantial force in the arguments of the appellants. Design of the production is only one of the component of the collaboration agreement. There are many more services which are provided in respect of the goods marketed by the appellant by the foreign collaboration. Therefore, only a portion of the lump sum amount to the design cost of product manufactured abroad. 6. In view of the above, while upholding the order to the extent that the cost of design n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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