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TMI Blog1995 (1) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... entered into a joint venture agreement to establish a new company in the name of Birla Yamaha Ltd. There was also an agreement with the Yamaha Motor Company of Japan by which the Japanese had 26% of equity holding. The Japanese Company by the agreement granted licence to the exclusive use of technical information and industrial property rights for the purpose of manufacture and assembly of generators and multi-purpose engines and parts thereof and the certain trademarks, design and other industrial property rights relating to generator and multi-purpose engines. The agreement also allowed to use the trade marks on locally manufactured products in consideration of the grant of the technical information the licencee was to pay to the foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Asstt. Collector, therefore, passed on order that the invoice value be loaded by 4.3% under Rule 9(1)(b)(IV) and Rule 9(1)(c) of the Customs Valuation Rules, 1988. 2. The matter was taken up by the respondents before the Collector (Appeals). The Collector (Appeals) in the impugned order held that the royalty is payable on the goods manufactured in India and the technical information is for the know-how for assembly and manufacture in India and that these are not in any way related to the imported components and will not affect the price thereof. He further observed that Rule 9(1)(c) of the Valuation Rules, 1988 is in respect of royalty and the licence fee related to the imported goods, that the buyer is required to pay as a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d., 1990 (48) E.L.T. 141 (Tri.) = 1990 (30) E.C.R. 226 as well as the Bombay High Court decision 1991 (55) E.L.T. 15 (Bom.) = 1993 (48) E.C.R. 571 UOI v. Mahindra & Mahindra. These decisions, learned SDR contended, were given with reference to the old Valuation Rules of 1963 and is not relevant for a case arising under the Valuation Rules, 1988. These Rules provided for the inclusion of royalty fees and for the transfer of technical know-how. The learned SDR further urged that the royalty paid in lumpsum to the foreign collaborators has a definite relation to the imported goods because without such payment the foreign supplier will not be selling the goods, therefore it is a condition for supply of the goods by the foreign collaborators. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the Mahindra & Mahindra (supra) and Modi Xerox (supra) and pleaded that the orders of the Collector (Appeals) are correct in law. 4. We have carefully considered the submissions made by both the sides. So far as valuation in similar circumstances under the Valuation Rules of 1963 is concerned, the matter is no more res integra. It stands settled by the order of the Supreme Court in the case of Maruti Udyog Ltd. case in which Tribunal decision was upheld. The ratio of the decision as well as the Bombay High Court decision in the case of Mahindra & Mahindra had been subsequently followed by the Tribunal in the Modi Xerox Ltd. case, in the Eicher Motor case and in the Order No. 391/94-A dated 8-12-1994 in the case of CC, Bom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be added to the price actually paid or payable for the imported goods, - (c) royalties and licence fees related to the imported goods that the buyer is required to pay directly or indirectly as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable." Therefore, the Rule comes into play only when such royalty and licence fee payment is related to the imported goods. In the present case clearly the royalty payment is not related to or is a condition for the import of the components but it relates to the right to manufacture the finished product in India. It is not a condition for the sale of the components. It is further found by the Tribunal in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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