2003 (6) TMI 101

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..... n. It decided to set up a plant for manufacture of hot-rolled coils and strips from out of the iron, and also to increase the existing capacity of the sponge iron plant. The appellant approached Met-Chem Inc., a Canadian company for this purpose, and negotiations between the two resulted in signing of two agreements between them. On 13-4-91 it signed an agreement with it. The agreement signed on 13-4-1991 provided that in consideration for supply by Met-Chem of engineering and other technical services for setting up the plant, it would be paid DM 78,950,000. By a subsequent amendment this figure was increased to DM 94 million. An order was placed on 21-6-1991 for supply of machinery and equipment initially valued at US $ 163 million and sub .....

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..... for the appellant is that the services for which the payment had been made were not a condition of sale of the goods imported from Met-Chem. The services consisted of the following; project engineering services to oversee the successful setting up and commissioning of the plant and achieving its stable operation, including the valuation of technical proposals from various suppliers for the supply of plant and machinery including engineering design, etc.; supervision and monitoring of the project; arrangement for training of the appellant employees abroad, assistance in locating some contractor for technology for operation or maintenance of the plant and organisation of transfer of such technology and assistance and procurement of equipment .....

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..... that were incurred for dismantling the plant from its existing location in Germany so as to have it shifted. It did not approve addition of amounts spent for other purposes. Paragraph 29 of the judgment, which is reproduced below, makes the position clear : "There are various other clauses relating to civil engineering technical specifications, documentation and also inspection and check sizing of motors, reduction gear and hydraulics of Service Units etc. It is difficult to hold that the entire payment of engineering consultancy fee to V.A. will have to be added to the imported plants. But the plant was sold on "as is where is" basis. So whatever expenditure was needed to be incurred for dismantling the plant and making it ready for deli .....

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