1992 (7) TMI 188

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..... ant, as a part of the integrated steel plant being established at Visakhapatnam, for manufacture of Pitch Bonded Dolomite Brick. M/s. Burn Standard Company Limited, in turn, entered into an agreement on 26-2-1987 with M/s. Dolomit Werke GmbH, a company incorporated in West Germany for obtaining the technical know-how possessed by it relating to Pitch Bonded Dolomite Bricks. M/s. Burn Standard Company Ltd. in consultation with M/s. Dolomit Werke, GmbH appointed M/s. Laeis Works GmbH and M/s. Feist Incon GmbH as foreign sub-suppliers. Under the contract, Schedule-1 deals with scope of work of M/s. Burn Standard Company Ltd. Clause I.I.I provides for design and engineering. It says that design and engineering in Pitch Bonded Dolomite Brick Pla .....

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..... res, special tools and tackles to be paid to M/s. LAEIS GmbH, FRG and FEIST INCON, FRG respectively. It also provides for payment towards design and engineering to M/s. Burn Standard Company in India. 3. M/s. E.C. Bose & Company Limited, Visakhapatnam filed a bill of entry No. 307/18-1-1989 on behalf of M/s. Burn Standard Company for the clearance of equipment valued at DM 59,95,000 FOB supplied by M/s. LAEIS GMBH, West Germany. Since they have not included the fees payable towards design and engineering services of an amount of 35,33,000 DM, a query slip was issued on 19-1-1989 proposing to add proportionate charges of design and engineering under Rule 9 (1) (b) (iv) of the Customs Valuation Rules, 1988. In their reply, they have stated t .....

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..... red into an agreement with M/s. Dolomite Werke GmbH for the supply of know-how and the same has been described under Schedule-2 and Schedule-3 provides for payment of fees for design and engineering. In view of the know-how mentioned and in view of earmarking of payment fees towards design and engineering and in view of the fact that it does not relate to equipment imported by the appellants for the purpose of manufacture of the goods, we are of the view that the engineering fees paid to M/s. DOLOMITE WERKE towards design and engineering charges are not includible in the assessable value. In this context, we rely on an Order in a connected appeal No. C/2710/89-A in the case of Collector of Customs, Visakhapatnam v. M/s. Visakhapatnam Steel .....

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