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TMI Blog2001 (1) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation of each machinery for planning and preparation of the drawings for civil works and for erection and setting up of the machinery including instruction manuals etc. The cost of such documents supplied by Pirelli was included in the agreed upon selling price of the machinery and no amount has been paid by the appellants over and above the agreed selling price. 1.2In the said contract entered into by the appellant with Pirelli, various knowhow documentation and basic design documentation was also to be provided by them at a separate lumpsum price of Italian Lira 5,40,000,000. Annexure (V) to the said contract gives the price of the documentation and the details of the same. 1.3The appellants filed bills of entries for home consumption in respect of the consignment containing basic engineering documentation at a declared price and claimed the classification of the same under Chapter 49 of the Customs Tariff attracting nil rate of duty. 1.4The Assistant Commissioner of Customs, Air-cargo Complex, Calcutta by his order dated 14-6-1999 held that the price of Italian Lira 540,000,000 for the said knowhow documentation and basic engineering documentation was liable to be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India such as procurement of raw materials, details of manufacturing processes, civil works, developing in India, detailed engineering for various activities etc. This fact has also been admitted in the Asstt. Commissioner's order. In these circumstances the appellants contend that there is no scope to include the charges paid for such documentation in the assessable value of the imported machinery and equipments. 4.Shri Bagaria further argues that the reliance placed by the authorities below on another contract with Pirelli is totally mis-conceived inasmuch as it is the terms and conditions of the present contract, which should be considered for the purposes of arriving at a finding as to whether the technical knowhow and basic engineering documents are a part and parcel of the imported machinery by the appellants or not. He submits that the said documents cannot be classified as machinery under Chapter 84 of the Customs Act, as has been done by the authorities below. The same properly fall under sub-heading No. 4906.00 of the Customs Tariff and attract nil rate of duty. In this connection he refers to the Tribunal's Order No. A-602/Cal/2000 dated 12-5-2000 [2001 (130) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it becomes clear that purchase of knowhow and basic engineering documentation is a pre-condition in the contract for sale of the tyre manufacturing plant. The Commissioner (Appeals) has also accepted that the technical knowhow is for the manufacture of the radial car and light truck tyres in the appellants' factory, but has concluded against the appellants on the ground that they have purchased vital machineries for the manufacture of tyres along with the documents and as such the value of the documents is required to be added in the value of the machineries. 9.We find that an identical question was before their Lordships of the Hon'ble Supreme Court in the case of TISCO Ltd. v. CCE C - 2000 (116) E.L.T. 422 (S.C.) = 2000 (37) RLT 239. In that case also M/s. TISCO had imported from Protugal several machineries and equipments as well as technical documentation. The overall price was 26 million DM and it consisted of 12.5 million DM for technical documentation and 13.5 million DM for equipments and materials. The assessee claimed clearance of technical documentations at nil rate of duty under SH 4906.00. The Customs authorities were contending that the price for supply of techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has undertaken to erect or assemble the machinery after its importation into India and levied certain charges for rendering such service the price paid therefor shall not be liable to be included in the value of the goods if it has been paid separately and is clearly distinguishable from the price actually paid or payable for the imported goods. Obviously, this interpretative note cannot be pressed into service for calculating the price of any drawings or technical documents though separately paid by including them in the price of imported equipments. Clause (a) in third para of note to rule 4 is suggestive of charges for services rendered by the seller in connection with construction, erection etc. of imported goods. The value of documents and drawings etc. cannot be "charges for construction, erection, assembly etc." of imported goods. Alternatively, even on the view as taken by the Tribunal on this note, the drawings and documents having been supplied to the buyer-importer for use during construction, erection, assembly, maintenance etc. of imported goods, they were relatable to post import activity to be undertaken by the appellant. Such charges were covered by a separate co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Tariff. There is no provision therein or in the section notes and chapter notes thereof which provides that designs and drawings imported as above can be or are to be classified or assessed with reference to the tariff heading of the corresponding machinery. Designs and drawings are continued to be goods classifiable under chapter 49 of the Customs Tariff and duty therein has to be assessed and levied accordingly. The subject imports cannot be considered to be classified under Accessory (Condition) Rules, 1963 as machinery, since they have not been imported along with that article of machinery in the present case. Therefore, the order classifying the drawings and designs as machinery cannot be upheld by us. The same is therefore, required to be set aside and ordered accordingly. When we are setting aside the order on classification of the drawings and designs as machinery we find that the issue of valuation is covered by the Supreme Court decision in the appellant's own case we cannot uphold the order regarding the valuation also." The above observation made by the Tribunal supports the appellants' stand that the documents in question have to be classified under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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