POLAR MARMO AGGLOMERATES LTD. Vs. COMMISSIONER OF CUS.

JUDGEMENT

(1.) THIS is an appeal at the instance of M/s. Polar Marmo Agglomerates Ltd. who imported certain plant and machinery from M/s. Breton S.P.A. Industria Meccanica, Italy as part of the collaboration agreement dated 20 -6 -89 entered into between the parties. The issue for consideration relates to the valuation of the plant and machinery thus imported. The Commissioner (Appeals) while affirming the order of the adjudicating authority took the view that fee for transfer of know -how and also for assembling and start up of the plant are to be added to the assessable value of the imported plant and machinery. The above finding is under challenge in this appeal at the instance of the importer.

(2.) IT is contended on behalf of the appellant that the Commissioner has mis -interpreted the terms of the contract and wrongly applied the ratio of Essar Gujarat in this case. According to the appellant the case is covered by the decision of the Supreme Court in Tata Iron and Steel Co. Ltd. v. CCE&C, Bhubaneswar, 2000 (116) E.L.T. 422 and that of this Tribunal in CC, Mumbai v. Rockland Building Materials Ltd., 2000 (115) E.L.T. 228. The appellant submits that agreement to purchase the plant and machinery, agreement regarding assembling and start -up of the plant and agreement for transfer of technical know -how licence are three different parts of the collaboration agreement dated 20 -6 -89. It is pointed out that the Commissioner (Appeals) has wrongly understood the transfer of licence and technical know -how as one for making the plant operational. Know -how licence that is being granted gives the customer agglomerate know -how and a complete and tested programme with necessary assistance. It is not in the matter of plant and machinery which is imported. The appellant would further submit that fee for assembling and start -up of the plant is separately charged and neither the know -how licence nor the agreement for assembling and start -up of the plant is a condition for sale of the plant and machinery. In the show cause notice allegation is that Rule 9(1)(c) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 would apply in the present case. The above rule reads as follows:

(3.) LEARNED Departmental Representative, on the other hand, submits that unless plant and machinery is assembled and start -up of the plant is over with the assistance of know -how, no useful purpose would be served by import of plant and machinery. Therefore, Commissioner (Appeals) was fully justified in adding know -how fee as well as assembling and start -up fee to the value of the plant and machinery.