THERMON HEAT TRACERS LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants imported certain spares and components which were supplied by their principals abroad. On valuation was done following and an order was passed by the Asstt. Collector of Customs GVC/SVB on 27 -9 -94 enhancing the declared FOB value by 20%. This order was ex parte. In appeal the Commissioner (Appeals) ordered the remand.

(2.) IN remand the Dy. Commissioner found that the appellants were a subsidiary of a company in USA which held 70% of the share capital in the Indian Company. The appellant herein the Indian company was manufacturing heat tracing cable and heat transfer cements in technical assistance with the company in USA. They were importing spares/warranty spares from their collaborators which are impugned herein.

(3.) AS far as royalty is concerned it is payable on the indigenous value addition of the product (i.e. to say the cost of the product to be calculated is exclusive of the cost of bought out components and landed cost of imported components (irrespective of the source of procurement.) As such it cannot be added to value of imported components. Also they have not remitted any royally to the principal. Even otherwise the royalty payable for a right to reproduce or to copy the imported goods in India is not to be added to the price paid/payable vide interpretative notes to Rule 9(1)(c) of Customs Valuation Rules, 1988.