2004 (3) TMI 668 - AT - Customs

Summary

Issues:
Interpretation of technical know-how fee as royalty and its impact on the assessable value of imported goods.

Analysis:
The appellant contested the Order-in-Appeal that deemed technical know-how fee as royalty, thus affecting the assessable value of the imported goods. The contract specified royalty payments on domestic sales and finished goods manufactured from imported capital goods, arguing that such royalty pertained only to finished goods, not imports.

The Tribunal referred to a previous decision by the Larger Bench in S.D. Technical Service v. C.C., New Delhi, which clarified that technical know-how fees for indigenous manufacture were not to be included in the assessable value of imported goods. The Commissioner (Appeals) had relied on a Supreme Court decision involving technical know-how fees essential for plant operation, which differed from the present case where royalty was linked to manufactured goods. The Tribunal found the Larger Bench's ruling applicable, setting aside the impugned order and allowing the appeal.