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TMI Blog2011 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... was examined by GVC/ SVB for determination of assessable value of goods under Section 14 of the Customs Act, 1962 read with Customs Valuation Rules1988, as it was found that the appellant was collaborator of the party situated in Germany. The agreement and all the relevant details were called for by the authority and it was noticed that appellant had committed to pay an amount as disclosure fees and further amount as royalty fees calculated on the basis of net ex-factory sale price of products. The adjudicating authority found that the lumpsum amount payable as disclosure fees is not in relation to the goods imported and the royalty paid by the appellant being in respect of the finished goods which were manufactured from the capital goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted capital goods and machinery for the purpose of setting up a plant for the manufacture of carburetors. He would submit that there is nothing in the agreement which indicate that the machineries which are imported by the appellant were manufactured by the foreign collaborator. It is his submissions that factually the said machines were supplied by the collaborator after purchasing from other manufacturers which is evident from the letter dt.6.10.2000 written by the appellant to Dy. Commissioner of Customs Valuation Cell. It is his submission that in an identical issue, the Hon ble Supreme Court in the case of Commissioner of Customs Vs. Ferodo India Pvt. Ltd. reported in 2008 (224) E.L.T. 23 (S.C.) has held that licence fee should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods which are proprietary in nature and licence fee is paid for such imports. It is his submission that the imported goods are of no use unless same is accompanied by know-how of the collaborator for manufacture of carburetor. It is his submission that inclusion of know-how fees is provided under Rule 9 and has to be decided on its own merit irrespective of relationship of parties and declared values. Hence in this case, it is his submission that the licence fee needs to be included in the value of imported goods. On a specific query, it is his submission that Revenue has not filed any appeal against findings of the Ld. Commissioner as to non-inclusion of royalty in the value of the imported goods. He would rely upon the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract/agreement with the collaborator for payment of disclosure fees. It is also undisputed that the machinery which has been imported by the appellant are not manufactured by the collaborator but were dispatched to India after purchasing the same from other manufacturer. 7. On this factual matrix, it has to be decided that whether the disclosure fees paid by the appellant to the foreign collaborator needs to be included in the value of the imported capital goods, machinery, plant and equipments. 8. At the out set, we find that the Ld. Commissioner has recorded a finding that the imported goods, i.e. capital goods are proprietary in nature. From the perusal of the records, more specifically the letter dated 6.10.2000 addr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department to ascertain whether there exists a price adjustment between cost incurred by the buyer on account of royalty/licence fees payments and the price paid for imported items . 10. It is also seen that the Apex Court in the case of Toyota Kirloskar Motor P. Ltd. (supra) had taken an identical view. Further, we find that this Bench in the case of Totalfinaelf India Ltd.. (supra) wherein I was one of the member as also taken an identical view relying upon the judgment of the Hon ble Apex Court in the case of Toyota Kirloskar Motor P. Ltd. (supra) and the Larger Bench of the Tribunal in the case of S.D. Technical Service Vs. Commissioner of Customs, New Delhi reported in 2003 (155) E.L.T. 274 (Tri.-LB) has also held that technic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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