KARNATAKA PETROSYNTHESIS Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) CHALLENGE in this appeal at the instance of the assessee is against the order passed by the Commissioner (Appeals) dated 14 -10 -2003. In the above order the Commissioner (Appeals) has taken the view that licence fee paid by the appellant to M/s. China National Chemical Construction Corporation, China (CNCCC) for supply of know -how manufacturing in India is to be added to the transaction value of capital goods, namely, Twin Screw Extruder machine with accessories and spare parts imported by the assessee. A show cause notice was issued to the appellant by the Customs authority seeking to finalize the assessment by including know -how fee of US 38,000 paid to CNCCC to the value of capital goods imported. The adjudicating authority took the view that the licence fee is not includible in the value of capital goods except to the extent of US 2850. Department took up the matter in appeal and the appellant filed a cross -objection. The Commissioner (Appeals) under order dated 18 -2 -2002 allowed the appeal filed by the department. The appellant challenged the above order before the Tribunal. By order dated 2 -7 -2002 Tribunal remanded the matter to the Commissioner (Appeals) for de novo consideration. Thereafter, by order dated 14 -2 -2003 the Commissioner (Appeals) again allowed the appeal filed by the department. He took the view that the entire amount of licence fee to the extent of US 1,90,000 has to be loaded to the transaction value even though show cause notice had referred to only inclusion of US 38,000. Aggrieved by the above, the assessee has come in appeal before us.

(2.) MAINLY two contentions were raised before us by the learned Counsel for the appellant. It is submitted that the Commissioner (Appeals) has travelled beyond the scope of the show cause notice in adding US 1,90,000 when under the show cause notice the proposal was only to add US 38,000. Secondly, it was contended that on merits no portion of the licence fee is to be added to the transaction value of the machines imported since it would not come within the provisions of Rule 9(1)(c) of Customs Valuation Rules, 1988.

(3.) WE went through the records of the case and heard the learned DR also.