9911796707
TMI Blog2008 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... West Germany. This joint venture company in Germany, hereinafter referred to as "HAKO", is the supplier of the above goods. The relationship between "HAKO" and the appellants in terms of Rule 2(2)(i) and (iv) of the Customs Valuation Rules, 1988 is an admitted fact. The appellants were appointed as the representative of "HAKO" in India under an agreement, hereinafter referred to as the "Representation Agreement". Under para 3.2 of this agreement, "HAKO" was liable to pay the appellants a commission of 10% of the sale price of the goods directly sold by the former to third parties in India. Under this para, thus, the interest of the representative was safe guarded in direct sale transactions between "HAKO" and third parties in India. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s agreement, the appellants would purchase goods from "HAKO" and resell the same to customers (third parties) in India. It was not open to "HAKO" to sell goods directly to such customers without considering the interest of the distributor. In case of the necessity for direct sale by "HAKO" to third parties in India, a commission of 15% of the sale price to the customer had to be paid to the distributor (para 3.2). It is said that this benefit was allowed for the services of the distributor, such as after-sales service, maintenance of repair shops, maintenance of stock of spare parts, handling of warranty claims etc. 2. The goods under assessment in these cases were imported from "HAKO" by the appellants in their capacity as distributor. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 9(1)(c). Thus, at the hands of SVB, the appellants were confronted with a proposal to enhance the assessable value of the goods imported by them, to substantially high levels. Aggrieved, they preferred an appeal to the Commissioner (Appeals). The appellate authority restricted to 10% the loading of value of the imported machines in terms of 3.2 of the Distributorship Agreement and reduced the deductible discount in respect of spares by 5%, and, subject to these modifications, sustained the decision of the joint Commissioner. The present appeal is against the appellate Commissioner's order. 3. After hearing both sides and considering their submissions, we have found a notable shift in the stand taken by the appellants themselves. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It appears from the submissions of the learned counsel that the 20% commission which was provided under para 3.7 of the Representation Agreement, to be paid by "HAKO" to the appellants, has nothing to do with the goods imported by the latter. That was a commission payable to the appellant by the supplier where third parties in India purchased and imported goods. from "HAKO". It is not clear as to why a commission relatable to imports by third parties from the foreign supplier is sought to be added to the value of the goods imported by the appellants from the same supplier. 5. From the foregoing discussion, it appears that a remand of the case to the original authority is imperative. That authority can also reconsider the question whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also considered by the Hon'ble Supreme Court in Ferodo India case and, therefore, we do not find it necessary to examine the applicability of this decision to the facts of the present case. It appears from the terms and conditions of the Technical Collaboration Agreement that the know-how was imported by the appellants from "HAKO" for the purpose of manufacturing machinery in India. Though a nexus is seen between the know-how fee and the finished product (machinery), no such relation exists between the fee and the imported components. There is also nothing in this agreement to indicate that the import of technical know-how and the payment therefor had any relation to the imported components so as to attract Rule 9(l)(c). It was on similar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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