TMI Blog2003 (5) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... ing House Brake Signal Company Ltd., U.K. (for short, WBS) for the manufacture of Air Brake Distributors and pneumatic Door Closers. Under the agreement between the appellants and WBS an amount of U.K. Pound 50,000 is to be paid by the appellant to WBS in lieu of disclosure of technical know-how. As per agreement the appellants are given the right to manufacture and assemble in India licensed equipment for use in railway locomotives and rolling stock with the technical know-how supplied by the WBS. Agreement also provided for training by WBS to employees of the appellants. Appellants were to manufacture licensed equipment strictly in accordance with the manufacturing information and specifications supplied by WBS and the appellants are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has observed in his order as follows :- "Technical know-how fee payable in this case is for import of specific components for manufacturing specific parts as per design of WBS in India." It is the case of the appellant that above observation is factually incorrect going by the terms of the agreement. He also contended that technical know-how fee has no relation whatsoever with the goods imported. In support of the above submission the Learned Counsel for the assessee referred to the following clauses in the agreement. Clause (B) in the Preamble reads as follows : "S.D. is desirous of manufacturing the railway brake control equipment and door operating equipment hereinafter mentioned for use on Indian Railways and WBS has agreed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsed Equipment the sum of fifty thousand pounds (50,000) Sterling payable in three equal instalments of Sixteen thousand six hundred and sixty six pounds sixty-seven pence (16,666.67) Sterling each, the first to be paid within thirty (30) days of the effective date, the second to be paid within thirty (30) days of WBS notifying S.D. of its readiness to despatch the Technical Know-how and the third to be paid within thirty (30) days of S.D. commencing commercial production if the Licensed Equipment (but in any event by not later than three years from the Effective Date)". The appellant would contend that know-how was being provided for the domestic manufacture of the licensed equipment. It cannot, in any manner, be related to the goods imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard the Learned Departmental Representative. He submitted that the ratio of the decision of the Supreme Court in Collector of Customs v. Essar Gujarat Ltd. - 1996 (88) E.L.T. 609 (S.C.) is to be applied in the present case. It has been held therein that the value of the plant will comprise not only price paid for the plant but also price payable for the operation licence and technical know-how. Reliance was also placed on the decision of the Supreme Court in Associated Cement Companies Ltd. v. CC - 2001 (128) E.L.T. 21 (S.C.) where it has been held that engineering, development, art work, design work and plant will form part of the price of the goods for the purpose of determination of transaction value in view of the provisions contain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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