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2011 (12) TMI 109 - HC - CustomsJoint venture between Honda Motors Co., Japan and Siel India Limited, India - manufacture and sale of automobiles with technical know-how/information etc. from japan – value to be assigned to imported drawings etc. - Revenue contention- Total lump sum fee of US$ 30.5 million constitutes the true and correct value of the imported drawing etc - expenses on personnel, not part of lump sum fee were separately payable - applicability of Rule 9(2)(e) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - Held that:- The value of the imported goods, i.e. the drawings etc., has to be determined at the time and place of importation. Customs duty has direct nexus with the value of the goods imported. The question of computation of the value of the imported drawings etc. is remanded back to the Settlement Commission for fresh adjudication keeping in view the observations and findings of High court on following grounds: (i) Technical information and know-how need not be through the medium of plans, drawings, manuals etc. It can be by other modes and means or non document form including intangible forms like deploying personnel or overseeing construction of the factory or manufacturing, training to staff etc. It is clarified that bifurcation of value between drawing etc. and 'others', is another aspect and has to be specifically examined and considered and computed after detailing material/evidence. Further, lump sum fee paid is not restricted to technical know-how or information supplied or furnished till December, 1997 as there was a contractual requirement that the know-how or information shall be furnished for a period of 7 years or 10 years. The technical know-how is not restricted to setting of the plant, but also for manufacture of cars including designs, engine, transmission etc. With regard to expenses on personnel – Under TPA and Memorandum of Understanding separate payment was mandated when personnel were deputed or sent to Honda Japan on specific request. This aspect will be re-examined by the Settlement Commission and decide whether expenses paid to personnel are included in lump sum fees paid. It is also held that Rule 9(2)(e) applies when an addition is made to value of imported tangible goods in the form of machinery, plant, etc. by including value of know-how, which has been billed separately, but is intricately or otherwise linked with the imported machinery/plant. This is not so in the present case, hence Rule 9(2)(e) is not applicable.
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