TMI Blog1994 (9) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants commenced importation of CKD components of `LCV , spare parts and warranty spare parts. 2. Pending a decision on the question of acceptability of the invoice values, the customs authorities decided to allow the clearance of goods imported by the appellants from their collaborators on provisional basis after loading the invoice values by 25%. Subsequently by his order dated 23-6-1989, the Assistant Collector of Customs, Special Valuation, Bombay, held that in view of the Joint Venture Agreement and Technical Assistance Agreement there was a special relationship between the appellants and their foreign collaborators. On the grounds that the appellants were using the patent, design and trade mark of the foreign collaborators and as per Rule 6 of the Customs Valuation Rules, 1963 any fee paid for use of patent, design and trade mark is to be included while determining the value of imported goods, he held that having regard to the royalty paid by the appellants the invoice value of components, CKD Packs and Light Commercial Vehicles supplied by the foreign collaborators should be loaded by 0.25% under Rules 6 and 8 of the Customs Valuation Rules, 1963. Similarly, in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector (Appeals) on the provisions of Brussels Convention was wholly misplaced since the provisions of the said convention had not been incorporated in the statute. He added that the recommendations of the Customs Cooperation Council referred to by the Collector (Appeals) were also not relevant. He stated that the export prices of the goods supplied by the appellants foreign collaborators were settled after negotiations and accepted by the appellants only if they were fair and competitive. He contended that the impugned order was not sustainable in view of the Tribunal s decision in the case of Collector of Customs v. Maruti Udyog Limited reported in 1987 (28) E.L.T. 390 in which the facts were identical. In support of his submissions he also cited the following case law :- (i) 1991 (55) E.L.T. 15 (Bom.) - Union of India v. Mahindra and Mahindra Ltd. (ii) 1990 (48) E.L.T. 141 (Tribunal) - Collector of Customs v. Modi Xerox Ltd. (iii) 1991 (55) E.L.T. 102 (Tri.) - Honesty Traders v. Collector of Customs (iv) 1992 (60) E.L.T. 327 (Tri.) - Sawhney Export House v. Collr. of Customs. 4. On behalf of the respondents Shri A.K. Singhal, ld. JDR submitted that there is no fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y supported his findings . He reiterated his stand that on account of the special relationship between the appellants and their foreign collaborators, the assessable value of the goods in question was to be determined under Section 14(1)(b). On these grounds he pleaded for the rejection of the appeal. 5. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that the main point that arises for consideration in this case is whether having regard to the terms of the agreements entered into between the appellants and their foreign collaborators, they have to be deemed as having interest in the business of each other and the value of the goods and the value of components, CKD packs and light commercial vehicles has to be determined under Section 14(1)(b) of the Customs Act read with Customs Valuation Rules, 1963 as held in the impugned order or as claimed by the appellants such goods would be assessable under Section 14(1)(a) on the invoice price. 6. The appellants who are engaged in the manufacture of light commercial vehicles have entered into a Joint Venture Agreement with M/s. Mitsubishi Motors Corporation and M/s. Mits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt s judgment in the case of Union of India v. Atic Industries, reported in 1984 (17) E.L.T. 325 the Tribunal had held that to rule out valuation under Section 14(1)(a) one sided interest is not enough; there should be mutuality of interest or in other words buyer and seller should have Interest in the business of each other . On these grounds when Suzuki held 26% shares in Maruti and also had proportional representation on the Board of Directors of Maruti, the Tribunal held that even though there was transfer of technical know-how from Suzuki to Maruti under a separate transaction governed by the Licencee Agreement for which Suzuki was being paid some price, it could not be said an interest of Maruti had been created in the business of Suzuki, Japan. The Tribunal also held that payment of royalty/fee under the Licencee Agreement was relatable to indigenous manufacture of components and vehicles of Suzuki s patents, designs and specifications and the use of trade mark was also for marketing of indigenously manufactured goods and neither royalty nor the use of trade mark had anything to do with import of components and assemblies from Japan. On these grounds the Tribunal rejected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the case of Collector of Customs, Bombay v. Maruti Udyog (supra) had not settled the question that in the facts of the case the values of the imported goods were to be determined under Section 14(1)(a) of the Customs Act, 1962, since there was a difference of opinion between the two Members and the Supreme Court while disposing of the appeal had not gone into the merits of the case. It is seen that this point was also raised on behalf of the Revenue before the Division Bench of the Bombay High Court in the case of Union of India v. Mahindra and Mahindra Ltd., reported in 1991 (55) E.L.T. 15 in which the issues arising for consideration were similar to the appellant s case. Having regard to the fact that the crucial words Interest in the business of each other are identical in both the statutes, the High Court held that the learned Single Judge was perfectly justified in relying upon the decision of the Supreme Court in Atics case to conclude that there was no mutuality between Mahindra and foreign collaborators, as they had no interest in the business of each other, consequently the Assistant Collector was not right in excluding the application of Section 14(1)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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