COMMISSIONER OF CUSTOMS (I) Vs. MAX ATOTECH LTD.

JUDGEMENT

(1.) HEARD both sides. Revenue filed this appeal against the ld. Commissioner (Appeals)'s order 39/2005 (JNCH), dated 17 -2 -2005 whereby the ld. Commissioner (Appeals) has upheld the lower adjudicating authority's order.

(2.) THE respondent M/s. Max Atotech Ltd. imported goods from their collaborator and associated companies M/s. Atotech B.V. Netherland (Atotech for short). Since the import was from their collaborator and associated companies the case was registered in GATT Valuation Cell for examination and valuation of goods imported by them. Accordingly, the respondent was directed to submit reply to the questionnaire which was complied with by the respondent. The lower adjudicating authority accepted the transaction value declared in the invoice under Rule 4 of the Customs Valuation Rules, 1988. Aggrieved by the same, the department filed appeal before the ld. Commissioner (Appeals) on the ground that the respondent have not paid any element of royalty payable towards the licence and technical know -how necessary to manufacture the Atotech speciality chemicals which is includible in the assessable value. The ld. Commissioner (Appeals) by holding that the running royalty paid on percentage of net sale price for manufacturing operation in India as per the know -how agreement is not includible to the price of the imported goods, and accordingly upheld the lower adjudicating authority and dismissed the appeal of the Revenue. Hence the appeal.

(3.) THE contention of ld. advocate appearing for the respondent is that there is no condition in the said agreement for the respondent to purchase the raw material from Atotech. The contention is that on purchase of raw material by the respondent from Atotech the latter was to charge the prevailing international price to Atotech group price. The contention is that there is no dispute that know -how supply purchase pertain to the goods manufactured in India and nor to the imported goods and the ld. Commissioner (Appeals) distinguished the decision in Essar Gujarat Ltd. (supra). The contention is that royalty and technical know -how paid is not a condition for sale of the goods and same is not includible in the assessable value. In support of the contention, they have placed reliance in CC v. Ferado India P. Ltd. - : 2008 (224) E.L.T. 23 (S.C.).