TMI Blog2007 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ol) Appellate Tribunal (CEGAT), Mumbai. 2.Respondent No. 1 herein, during the assessment year 1977-78, imported raw material from M/s. Sandoz Quinn [subsidiary of M/s. Sandoz (India)]. This was under the Technical Collaboration Agreement dated April 2, 1990, between the said two companies. That Technical collaboration agreement provided for import of capital goods, raw materials, intermediates etc. along with transfer of technical know-how and technical assistance for upgradation of the respondent's manufacturing plant in India. The respondent is a manufacturer of leather chemical products. Respondent entered into three agreements particulars of which are given at page 36 of the paper book. One of the agreement is called Technical Collabo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority the Department carried the matter in appeal to the Collector of Customs (A). It was urged on behalf of the Department that the two companies were related and that the fees were includible in the assessable value of the capital goods. 5.By order dated 31-12-1997 passed by the Collector of Customs (A) it was held that the technical know-how charges were required to be loaded to the value of raw materials. It was further held that though the two companies were related their relationship did not influence the value of the capital goods. It was further held that since the said two companies were related valuation should be done under Rule 4(2)(a) and (b) in the matter of computing the assessable value of the raw material. 6.Aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal. 9.We do not agree with the approach of the Tribunal for the following reasons. Firstly, in the present matter the adjudicating authority proceeded on the basis that the above two companies were not related to each other. The entire finding of the adjudicating authority is based on the premise that the two companies are not related. That premise got eliminated when, before the appellate authority, the Advocate for the assessee fairly stated that the respondent company and M/s. Sandoz Quinn were related. Secondly, in the present case three agreements were entered into by respondent herein with three different companies, one of which was M/s. Sandoz Quinn. Once it is conceded on behalf of the respondents that the two companies are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foreign collaborator. 11.In the present case that is not so. The respondent here had conceded before the appellate authority that the two companies are related. We make it clear that merely because the two parties are related to each other will not amount to undervaluation per se. It will depend on the facts and circumstances of each individual case. 12.For the above reasons we set aside the impugned judgment of the Tribunal and remand the matter to the adjudicating authority which will decide the matter de novo in accordance with the Customs Valuation Rules, 1988. The adjudicating authority will not only go by apparent tenor of the agreement, but also examine the necessary facts and decide the matter in accordance with law. We do n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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