TMI Blog2011 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and the price paid for imported items - The admitted fact therein was that M/s. HWIL had technical know-how to the equipment which were imported by the appellant and they were to pay a technical know-how fees to M/s. HWIL, and were to give performance guarantee to Steel Authority of India Ltd., which had connection with the goods imported - Appeal is allowed - C/696/2004-Mum. - A/300/2011-WZB/C-I(CSTB) - Dated:- 5-7-2011 - Mr. M.V.Ravindran, Mr. Sahab Singh, JJ. Shri V. Lakshmikumaran, Advocate for appellant Shri Sanjay Kalra, JDR Authorized Representative, for respondent Per : M.V. Ravindran This appeal is directed against order-in-appeal No.222/2004-MCH dated 20th May 2004. 2. The relevant fact that arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were imported. Hence this appeal. 3. The Ld. Counsel Shri Laxmikumaran for the appellant takes up through the entire agreement entered into by the appellant with their collaborator. He would submit that the manufacturing know-how was covering the process of production of various types of carburetors which could be done only after the capital goods were imported and installed. He would also take us through the definitions in the said agreement and would draw our attention more specifically to the definition of technical information and submit that the said technical information was only for the manufacture or assembly of products and parts, which are carburetors. He would draw our attention to the lumpsum disclosure fees clause in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 (227) ELT 581 (Tri.-Mumbai) this Bench has held that for the purpose of assessment of the value, technical know-how fee cannot be included. It is also his submission that in the M/s. Avery India Limited Final Order No. A/7/WZB/05-C-I(CB) dt.4.8.2005, this bench has also held that licence fee or running royalty not relatable to the goods imported cannot be included in the assessable value of imported goods. 4. Learned DR on the other hand, would submit that the capital goods and the machinery which are imported by the appellant could not have been brought to use but for the technical know-how which is in the possession of the collaborators. It is his submission that the collaborator charges the royalty fees for installation of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit that reading of Rule 9 of the Customs Valuation Rules, 1988, would indicate that Rule 9(1)(c) could be only be pressed into service by the Revenue, as per the agreement. He reads the said Rule 9 (1) (c) and submits that the said rule clearly indicates inclusion of the payment of royalties and licence fees in the value, if they are related to the imported goods whether directly or indirectly. It is his submission that the argument of the Ld. JDR could be stretching the issue too far for inclusion in the value the licence fees paid by the appellant. 6. We have considered the submissions made at length by both sides and perused the records. On perusal of record, we find that it is undisputed that the appellant had imported capital go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... link between the goods imported and the payment of technical know-how fees, we find that the impugned order holding so, is unsustainable and needs to be set aside. 9. We are fortified in our view by the judgment of the Hon ble Supreme Court in the case of Ferodo India Ltd. (supra). We may reproduce the relevant paragraph wherein their Lordships have analyzed the very same Rule i.e. Rule 9 ((1) (c) of the Customs Valuation Rules in the said judgment. It is seen from the judgment that their Lordships in Paragraph No. 20 have categorically laid down as under:- Be that as it may in the present case, on reading TAA we find that the payments of roralty/licene fees was entirely relatable to the manufacture of brake liners and brake pads (l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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