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TMI Blog2008 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Ramesh, Advocate and M.S. Kumaraswamy, Consultant, for the Appellant. Smt. R. Bhagyadevi, SDR, for the Respondent. [Order per P.G. Chacko, Member (J)]. - This appeal filed by the assessee is against enhancement of assessable value of the goods imported by them, including machines and spare parts thereof. These imports were made over a period of time from a German Company, a joint venture of the appellants and M/s. HAKO-Werke GmbH Co., West Germany. This joint venture company in Germany, hereinafter referred to as "HAKO", is the supplier of the above goods. The relationship between "HAKO" and the appellants in terms of Rule 2(2)(i) and (iv) of the Customs Valuation Rules, 1988 is an admitted fact. The appellants were appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butorship Agreement"), the appellants were appointed by "HAKO" as distributors in India. This agreement, in its recitals, stated that the distributor would act as an independent merchant towards "HAKO" and the customers and further that the distributor would also act as an intending agent for HAKO-products. Duties of distributor were laid down in para 2 and those of "HAKO" in para 3 of the agreement. It appears from these provisions that, under this agreement, the appellants would purchase goods from "HAKO" and resell the same to customers (third parties) in India. It was not open to "HAKO" to sell goods directly to such customers without considering the interest of the distributor. In case of the necessity for direct sale by "HAKO" to thir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner ordered for inclusion of the technical know-how fee (lump-sum of DM 60,000) in the assessable value of the imported components under Rule 9(l)(c) of the Valuation Rules. The 5% royalty, which was required to be paid by the appellants to "HAKO" under the said agreement as a percentage of the net ex-factory sale price of the goods manufactured in India, was also ordered to be included in the assessable value of the above components under Rule 9(1)(c). Thus, at the hands of SVB, the appellants were confronted with a proposal to enhance the assessable value of the goods imported by them, to substantially high levels. Aggrieved, they preferred an appeal to the Commissioner (Appeals). The appellate authority restricted to 10% the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment of 15% commission by "HAKO" to the appellants in the factual situation stated therein. If so, the question arises as to why any loading of the value of the goods should have been ordered at all in terms of para 3.2 of the said agreement. The original authority ordered loading of 20% commission to the value of the goods in terms of para 3.7 of the Representation Agreement. The appellate authority has not rendered any clear finding on this aspect. It appears from the submissions of the learned counsel that the 20% commission which was provided under para 3.7 of the Representation Agreement, to be paid by "HAKO" to the appellants, has nothing to do with the goods imported by the latter. That was a commission payable to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, it is argued, the fee is not liable to be added to the transaction value of the goods under Rule 9(1)(c) ibid. In this connection, reliance has been placed on Commissioner of Customs v. Ferodo India Pvt. Ltd. [2008 (224) E.L.T. 23 (S.C.) 2008 (85) RLT 59 (S.C.)]. On the other hand, learned SDR has claimed support from Matsushita Television Audio (1) Ltd. v. Commissioner of Customs [2007 (211) E.L.T. 200 (S.C.)]. The decision cited by the learned SDR was also considered by the Hon'ble Supreme Court in Ferodo India case and, therefore, we do not find it necessary to examine the applicability of this decision to the facts of the present case. It appears from the terms and conditions of the Technical Collaboration Agreement th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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