2006 (5) TMI 492

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..... agreement was entered into in July, 1985. Broadly speaking, it provided for M/s.Toshiba to make available designs to M/s.Mitsubishi which would then manufacture various items to enable the setting up of a plant in India to manufacture colour T.V.picture tubes. For this purpose, M/s.Toshiba was entitled to the price not only of the goods supplied but also for the technical know-how given to run the plant. The question is whether the cost of the fees payable on account of the technical know-how was includible in the value of the imported goods. The technical know-how fees was paid by the appellant in five yearly installments. The first three installments were paid prior to 16th August, 1988. Two installments were paid thereafter. The releva .....

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..... rials consumed in the production of the imported goods;  (iv)engineering, development, art work, design work, and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods; (c) royalities 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,  (d)the value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues, directly or indirectly, to the seller;  (e) all other payments actually made or to be made as a condition of sale .....

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..... chnical documents had to be added to the value of the equipments. The reasoning is incoherent, illogical and unsustainable. None of the factors referred to by the Commissioner fulfill the requirements of Rule 9 (1)(b)(iv).  Similarly, the Tribunal, which affirmed the Commissioner's order, appears to have overlooked the basic elements of the Rule. The Tribunal held :-  "...........In the present case, the proprietary equipment of M/s.Toshiba manufactured by M/s.Mitsubishi and other contractors, was part of the plant and machinery installed in the manufacture of colour picture tubes. These equipments were the proprietary items of M/s.Toshiba and were manufactured according to the drawings etc. supplied by M/s.Toshiba. The kn .....

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