9911796707
TMI Blog2024 (4) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... . MSIL is making vehicles of several models in its factories. For manufacturing these vehicles, MSIL is required to purchase various OE components from several vendors. The components for any vehicle have to be made as per the OEM requirement only. The vehicle components are not general stand-alone items which can be manufactured as per any design/drawing /specification, but have to be made as per OE specifications. Only then the same can be fitted to the vehicle except for proprietary items like nuts, bolts etc. Once the vendor is finalized, selected and price is agreed, the vendor starts manufacturing the component according to the drawings/designs/specifications given to him by MSIL. MSIL is not selling drawings/designs/specifications to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the licensed agreement, MSIL is making royalty payments to SMC as lump sum royalty and running royalty for the right to use licensed information and licensed trade mark pertaining to vehicles. For manufacture of parts/components, MSIL provided drawings/designs/specifications in the form of papersheet as well as CAD/CAM without charging anything from their vendors. Based on the said drawings, designs and specifications provided by MSIL, the appellant was developing or getting developed die/moulds/designs. These dies and moulds are used to manufacture specific part and cost of dies/moulds, which were mortised determining the assessable value. The cost of these designs/drawings/specifications were not included by the appellant while determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aggrieved, the present appeal has been filed before this Tribunal. Appeal No. E/50008/2014 5. The present appeal also arises from the same order-in-original and the facts of the present case are also identical as the appellant is Original Equipment Manufacturer for MSIL, Haryana and MSIL, Gujarat. The appellant is engaged in the manufacture of Graphics, Stickers, Name Plates and Black Out Tape. MSIL is providing drawings and designs, technical know-how in the form of paper sheet as well as CAD/CAM without charging any amount from their vendors. Based on the said drawings, designs, specifications provided by MSIL, the appellant developed the drawings and designs themselves in the factory premises for manufacturing the required product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lligence, New Delhi, whereby the Principal Bench decided almost 200 appeals on the identical issue after considering at length the provisions of Section 4 of the Act and Rule 6 of the Valuation Rules, 2000 and allowed the appeals filed by the assessee. The relevant paras of the judgement are as under:- "35. What is important to note is that the appellant had to prepare detailed drawings and designs for which it received technical support from its present company Denso Corporation. License Agreements were entered into between the appellant and Denso Corporation for grant of a non-exclusive right to the appellant to manufacture, use and sell the licensed articles. In terms of the License Agreements, the appellant paid running royalty to Den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llip;. 42. In the present case, Maruti provided specifications of the parts or components to be fitted in the motor vehicles manufactured by Maruti to the potential vendors. The parts or components have necessarily to be manufactured as per the requisite dimensions of the parts or components so that they can be fitted in the vehicles manufactured by Maruti. It is for this reason that Maruti shared the requirements at the 'Request for Quotation' stage. The detailed drawings and designs were prepared by the Research and Development Division of the appellant with the help of technical support received from Denso, Japan. Maruti does not have the necessary technology to manufacture the products. As such, the technology has been patente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered view that the decision in Denso India Pvt. Ltd. (supra) squarely applies to the facts of the present case. MSIL is making vehicles of several models in its factories. For manufacturing these vehicles, MSIL is required to purchase various OE components from several vendors. The components for any vehicle have to be made as per the OEM requirement only. The vehicle components are not general stand-alone items which can be manufactured as per any design/drawing /specification, but have to be made as per OE specifications. Only then the same can be fitted to the vehicle except for proprietary items like nuts, bolts etc. Once the vendor is finalized, selected and price is agreed, the vendor starts manufacturing the componen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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