TMI Blog2008 (10) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... same to transaction value. - we find that the Commissioner (Appeals) has rightly observed that the lower adjudicating authority has not carried out the directions in the remand order and has gone beyond that. – Further, the new grounds now given by the Revenue in its appeal at second appellate authority stage to justify the loading, is not allowable - C/207-208/2003 - A/537-538/2008-WZB/C-II/(CSTB), - Dated:- 1-10-2008 - S/Shri M.V. Ravindran, Member (J) and K.K. Agarwal, Member (T) REPRESENTED BY : Dr. Tiju, JDR, for the Appellant. Shri C. Subba Reddy, Advocate, for the Respondent. [Order per : K.K. Agarwal, Member (T)]. - These two appeals are directed against the Order-in-Appeal Nos. 24 25/2003-MCH, dated 16-1-2003. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is made by the appellants for the services/assistance given by the collaborator as per clauses 1(b), 2 to 6, 11 to 12 and 14 of the agreement. These facilities are providing technical information, training of the employees, making available expert personal, ensuring quality of the product, the right to use trade mark and to compensate for increasing indigenisation. The royalty payments are paid as per clause 16(ii) of the agreement. As per the clause 16(ii), the royalty payment is made on the net selling rice of the goods. As per the definition of net selling price, the cost of imported goods and bought out items ought to be excluded for arriving net selling price among others for payment of royalty. The payment of royalties and licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h each other at arms length and collaborate agreement is written one. The Hon'ble Supreme Court in the case of Union of India v. Mahindra Mahindra Ltd. reported in 1995 (76) E.L.T. p.481 has held that technical know-how fees and royalty are not addable to the price of CKD packs and Spared imported by the party. The Hon'ble CEGAT in the case of Birla Yamaha Escorts Ltd., Modi Xerox Ltd., has also held that the know-how and royalty payment paid for the right granted to manufacture goods in India and the use of patent and trade marks is not related to import of companies spares and goods from the collaborator and the same cannot be added to the invoice value of goods imported to the collaborator. Therefore the legal position in the matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been arrived at (Para 2 of Findings order). (ii) Commissioner (Appeals) has observed that the lower authority has travelled beyond the remand order of the Appellant Commissioner dated 3-5-95. This observation is factually incorrect. The Appellate Commissioner in his order dated 3-5-95 has very clearly directed the lower authority to re-determine the quantum of addition if any required on the basis of specific parameters. On complying with the order dated 3-5-95 the Dy. Commissioner has re-determined the quantum of loading as 15.16% from the earlier 2.9% and has also stated the reasons thereof. (iii) Commissioner (Appeals) has observed "The royalty payments are neither directly or indirectly related to the imported goods and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two are related persons. Just being related does not mean that the transaction value is influenced by technical now-how fee and royalty paid and has therefore to be added. The reason for such addition are totally lacking in the order. In view of this, we find that the Commissioner (Appeals) has rightly observed that the lower adjudicating authority has not carried out the directions in the remand order and has gone beyond that. The grounds now given by the Revenue in its appeal do not find place at all in the lower adjudicating authority's order and new grounds are being created to justify the loading. This cannot be done at second appellate authority stage. In view of this we find no merit in the Revenue's (Appeals) and accordingly dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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