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TMI Blog2003 (7) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... n fact, in terms of the collaboration agreement, M/s. Atochem was to supply only basic engineering design package for the plant. The details of the engineering design package are listed in Annexure 2 to the agreement. The items listed in this annexure are description of process, process flowsheet, material balance, list of equipments, equipment specification sheets etc. and not the items mentioned in the rule. The detailed drawings were made in India by M/s. Dalal Consultants and Engineering Ltd. Therefore, the engineering fee of 6.3 million F.F. was also not required to form part of the assessable value of the imported machinery, as it was not undertaken elsewhere than in India . In view of the foregoing, the appeal is allowed, with conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -how has nothing to do with the individual items of machinery imported for setting up of the plant from third parties. With regard to the engineering fee, appellants point out that Rule 9(1)(c) of the Customs Valuation Rules is attracted only to engineering design work etc. "undertaken elsewhere than in India and necessary for the production of imported goods". The appellants contend that the findings in the impugned orders fail the criteria of "undertaken elsewhere than in India" and "necessary for the production of imported goods". It is pointed out that the Revenue has no case that the engineering drawings etc. were necessary for the production of the imported goods and that their suppliers produced the goods according to the engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of "Hydrochlorination reactor" was taken up. The learned Counsel explained that what was supplied was only basic engineering specifications like design conditions, materials, operating conditions etc. He further explained that these were further converted into detailed engineering drawings by M/s. Dalal Consultants and Engineers Ltd. The learned Counsel has submitted that it is clear from this that the detailed engineering drawings were made in India and for that, reason remained excluded from the scope of Rule 9(1)(c) of the Valuation Rules. The learned Counsel for the appellant has also submitted that this issue remains covered in favour of assessees by the decisions of this Tribunal in the case of M/s. Panalfa Dongwon India Ltd. v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand proceedings. 6. The impugned order has been passed purportedly relying on the decision of the Apex Court in the case of Essar Gujarat Ltd. That order related to a case where an operating licence was required to be obtained for making an imported plant operational. In the absence of that licence, the plant could not be put to production at all. The Apex Court accordingly, held that the licence fee is an integral part of the cost of the plant and the same was required to form part of the value of the plant. In the present case, there is no relationship between the licence and know-how fee and the imported goods. There is no condition that the individual machinery under import cannot operate without obtaining a license. The individual ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the imported goods. In fact, in terms of the collaboration agreement, M/s. Atochem was to supply only basic engineering design package for the plant. The details of the engineering design package are listed in Annexure 2 to the agreement. The items listed in this annexure are description of process, process flowsheet, material balance, list of equipments, equipment specification sheets etc. and not the items mentioned in the rule. The detailed drawings were made in India by M/s. Dalal Consultants and Engineering Ltd. Therefore, the engineering fee of 6.3 million F.F. was also not required to form part of the assessable value of the imported machinery, as it was not "undertaken elsewhere than in India". 9. In view of the foregoing, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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