AMC COOKWARE (P) LTD. Vs. CC

JUDGEMENT

(1.) The issue raised in this appeal at the instance of the importer is whether the Commissioner (Appeals) was justified in holding that the technical licence fee payable by the appellant is related to the imported goods and whether the technical licence fee which has not yet been paid is addable to the transaction value under rule 9(1)(c) of the Customs Valuation Rules 1988 in respect of import made by the appellant during the period august 2000 to February 2001.

(2.) The appellant is a joint ventrure company and 51% of its shares were held by Alpha BETEILIGUNGESELLSCHAFT Gmbh (hereinafter referred to as Alpha) and the remaining 49% of the shares are held by Ceejay Cookware Investments Ltd., Mauritius (hereinafter referred to as Ceejay). Ceejay had made application in January 2000 to Foreign Investment Promotion Board (FIPB) seeking clearance for investment in the appellant company. In the above application, it was indicated that the appellant company would be located at Bangalore, Karnataka and would be manufacturing a multi -cooking system, a unique product that allows cooking without addition of water and oil. It was also indicated that lump sum payment in the form of 'technical know how fees' of DM 2 million would be made in addition to the payment of drawing and design of net cost and engineering services fee of Euro 200 per day per person plus expenses. When approval was granted on 31.1.2000 the above payments were also indicated therein. The appellant was incorporated on 24.4.2000. On 18.4.2000, FIPB granted approval for transfer from Ceejay to the appellant.

(3.) M/s. Classic Cookware (P) Ltd. which was originally formed in July 1995 with Cookware investment, Mauritius holding 100% shares had set up a manufacturing unit at Bangalore in 1998 and commenced production of special type of steel cookware in June 1999. The semi -finished/unpolished steel cookware components were imported and they were polished and assembled at their unit at Bangalore. The appellant company on being set up purchased the raw materials, work in progress, semi finished goods from M/s Classic Cookware Pvt. Ltd. The fixed assets including various machineries employed in the manufacture of the goods were purchased at FOB value. The employees of Classic Cookware were transferred to the appellant company and the place of business was also handed over to the appellant. The manufacturing operation undertaken by the appellant was the same as was being done by Classic Cookware on and from June 1999. The appellant was importing unpolished cookware components and subjecting them to various processes at the unit at Bangalore and the finished goods were thereafter sold in India through the direct marketing route.