TMI Blog2002 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... all the importers and after due examination of the agreements filed by them with their collaborators and suppliers of the components/raw materials had come to the conclusion in the respective Orders-in-Original that the lump sum payment made by the importers in terms of the agreement as technical know-how fee is required to be added to the transaction value. The Deputy Commissioner, however, held that he does not propose to add certain royalty charges to the transaction value in view of the reasonings given in his order-in-original. The Dy. Commissioner had noted in his order that as per Interpretative Notes in Rule 12 of CVR '88, the technical assistance and know-how fee shall be added to the transaction value provided it is related to the imported goods and it is a condition of sale. After due examination, he came to the conclusion that the technical assistance and know-how fee is very much related to the imported goods and its value is required to be loaded to the transaction value. In this regard, he has noted 7 judgments including the judgment of the Tribunal rendered in CC, Mumbai v. Himson Textile Engineering Indus. Ltd., reported in 1997 (93) E.L.T. 301 wherein it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring techniques, updates technology, correctness of any modification or improvements or designing charges in the product, etc., besides use of trade mark of the supplier that is to have transferred the right of licence of the importer. It has also been stated by the Revenue that the imported components are used to manufacture the final products. The technical know-how is given to facilitate the manufacturing process. Without the use of technical information and other details provided as per the technical agreement for which the licence fee had been paid, imported components cannot be used. Hence, it is contended by the Revenue that the technical licence fee for giving rights to use technical information provided is related to the imported goods which is addable as per Rule 9 (1) (c) of CVR '88. It has also been contended that details of payment for technical assistance and know-how fees mentioned in the agreement itself goes to prove that this is a condition of sale of imported goods. Likewise, they have stated with regard to royalty or licence fee paid by the importers as having relation to imported goods mainly in two ways. First, the royalty or licence fee payment may be related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d items including inputs and the components and the Commissioner (Appeals) had gone wrong in not analysing the facts in terms of the agreement and the case-law. Therefore, the order being not a speaking order requires to be set aside and matter remanded to the Commissioner (Appeals) with a clear direction to examine each of the matters independently and proceed to decide the case in terms of the law laid down by various judgments. He submitted that a batch of appeals came up for consideration before this Bench in respect of same/similar issues and the Bench after considering the order of the Commissioner (Appeals) noted that the same was violative of principles of natural justice, besides order being a non-speaking order and that no detailed findings have been recorded for grant of benefit to the importers, set aside the same and remanded the same for de novo consideration as in the case of CC, Chennai v. TRW Rane Occupant Restraints Ltd Others vide Final Order No. 1903 to 1907/2001, dated 9-11-2001. He also pointed out that said order was applied in subsequent appeals in CC, Chennai v. Hozur Instruments Pvt. Ltd. by Final Order No. 1974/2001 dated 9-11-2001. Ld. SDR read out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2000 (115) E.L.T. 489 (Trib.)] the Bench comprising of Hon'ble President have noted that the foreign collaborator holding major equity of the Appellant (importer) and having right to nominate its Directors and in the absence of any evidence produced by the Revenue that the importer had any interest in the business of foreign collaborator, then in such cases, one sided interest of foreign collaborator is not enough to show mutuality of interest. In these cases, the Dy. Commissioner categorically gave a finding that the payment made as licence fee and know-how fee had influenced the transaction value and they were related persons. This judgment has been applied by the Commissioner but without analysing the facts. Likewise, the Apex Court in the case of U.O.I. v. Mahindra Mahindra Ltd. [1995 (76) E.L.T. 481 (S.C.)] has noted that the agreement between the buyer and seller should be properly interpreted and seen as to whether any influence of these terms on the price. The terms had been analysed in great detail by the Apex Court and found that there is no material to indicate any nexus between lump sum payment and supply of CKD packs at the same price at which they were sold to oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/2001 and C/3/2002 and 21/2002. In all these 10 Revenue appeals , the Consultant and the Advocate persuaded the Bench to accept the Commissioner (Appeals) order on the ground that the Order-in-Original had granted the benefit to the importer in respect of royalty paid by them. The Revenue had not raised any objection against the said granted benefit and as the Commissioner (Appeals) has confirmed that point, therefore Revenue cannot raise this issue at this point of time. He also submitted that the Commissioner (Appeals) has not erred in his order but has gone through various provisions of law including the agreement and is satisfied himself that there was no link between the transaction value and that of the royalty charges paid or technical know-how fee collected by the suppliers. Although, they are not seriously contesting the relationship between the importer and the supplier but that by itself is no ground to reject the transaction value. He also filed a detailed written submissions and persuaded the Bench to dismiss the Revenue appeals along with the stay applications. 7.Ld. Counsel Shri S. Muruggappan, assisted by Ms. Prameela Viswanathan argued in respect of appeals C/36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India and in terms of Rule 9(1)(c) of CVR, they are not includible as decided by the Apex Court in the case of U.O.I. v. Mahendra Mahendra Ltd. - 1995 (76) E.L.T. 481 (S.C.) and other Tribunal rulings. He further contended that the Dy. Commissioner had relied on those rulings but had no bearing on the import of raw materials and they were distinguishable. He contended that Rule 4(2)(c) of CVR '88 leads only to Rule 9 and submitted that the ld. Commissioner although has not extensively brought out in his order but yet has correctly arrived at the conclusion and the conclusion is required to be accepted. He also relied on the written submissions filed in these appeals. 9.Countering the argument, ld. DR Shri A. Jayachandran submitted in these batch of appeals that in Para 6 of the Order-in-Original of the Dy. Commissioner, there is a finding on the applicability of Rule 4(2)(c) of CVR '88 which has not been specifically ruled out by the Commissioner (Appeals). 10.Shri K.K. Warrior argued on behalf of the respondents in appeal C/419/2001 filed by Revenue against M/s. Featherlite Products Pvt. Ltd. Shri C. Saravanan argued for respondent in Appeal C/454/2001 in the case of CC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Appeals) that these charges are related to manufacture of the goods in India and not relatable to their import into India, they cannot be added under Rule 9(1)(c) and this fact has not been challenged in the grounds urged before the Bench. 14.Shri S.V. Subramanian, C.A., appeared in Appeal C/209/2001 in the case of Gayatri Starchem Ltd. v. CC, Chennai. Ld. Chartered Accountant submitted that one of the issues in the appeal pertains to the technical know-how fee while there are two other issues pertaining to classification of 'Electrolysers'. He pointed out that he had produced technical certificates to prove his contention that they are mechanical contrivances and not electrical contrivances. However, Revenue has not accepted their plea. They have also not produced any rebuttal evidence to substantiate their charge. He submitted that their technical expert has also not been cross-examined. Therefore, the plea that the item is a mechanical contrivances falling under heading 84.19 should be accepted and not as electrical contrivances falling under heading 85.43. He also submitted that appellants had made the prayer for grant of benefit of project import under 98.01 which has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all these matters and decided the case in full but, however, we notice that the Commissioner has erred in some of the cases in not giving a detailed finding on various issues touched upon by the Dy. Commissioner in the light of the examination of the contract. This very issue came up for consideration in a batch of appeals in the case of CC v. TRW Rane Occupant Restraints Ltd. Others which was decided vide Final Order Nos. 1903-1907/2001, dated 9-11-2001. A plea was raised by the Counsel that import of inputs in the manufacture of final product has no connection or nexus with the technical know-how fee paid by them with regard to transfer of technology and other benefits by the suppliers. The various arguments raised by both the sides in the written submissions and before us are required to be discussed in great detail by the Commissioner (Appeals) as already observed by the Tribunal in the appeals which have been remanded. Revenue has stated in their grounds of appeal and contended that the technical know-how fee is a consolidated fee which is paid by the importer even to the use of the inputs in the manufacturing process which brings into existence the final product. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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