HSI AUTOMOTIVE LTD. Vs. CC

JUDGEMENT

(1.) IN Appeal No. C/139/2004 of M/s. Boss Profiles Ltd., which arises for final hearing, the issue is whether the technical know -how fee paid by the appellant to an Italian company under a Technical Assistance Agreement with them is liable to be included, under Rule 9(1)(c) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, in the assessable value of the capital goods imported by them from the said company for the purpose of setting up a plant in India for the manufacture of vitrified ceramic tiles. Similar issues are involved in the rest of the cases also. Therefore, after dismissing the stay applications and allowing the applications for out -of -turn hearing of appeals, we are taking up such appeals also for final hearing and disposal.

(2.) AFTER examining the records, we note that, in all these cases, the appellants imported components/raw material for the manufacture, in India, of final products by making use of the technical know -how provided by the suppliers against payment of lump sum fees by the importers. In a few cases, the technical know -how fee paid by the importers to the suppliers of components/raw material was a consideration for technical assistance in the setting up of the manufacturing plant also. In some cases, what was paid by the importer to the supplier of components/raw material for technical know -how for the manufacture of finished goods in India was a royalty which was paid periodically as a percentage of the net sale proceeds of the finished goods. In all cases, the Special Valuation Branch (SVB) of the Department took the stand that the technical know -how fee/royalty paid by the importers to their technical collaborators abroad had a relation to the imported goods and that such payment had been made as a condition of sale of such goods and, therefore, under Rule 9(1)(c) ibid, the amount is required to be included in the assessable value of the goods. The SVB accordingly directed finalization of the provisional assessments in respect of the imported goods. The importers were aggrieved by such decision of the Deputy Commissioner/Joint Commissioner of Customs (SVB). They maintained that the technical know -how fee/royalty paid by them to the suppliers of the imported goods had no relation to such goods and that the transfer of technical know -how was not a condition of sale of such goods. On this basis, the SVB orders were taken in appeal to the Commissioner of Customs (Appeals). The appeals of some of the present appellants were allowed by the Commissioner (Appeals) and the latter's orders were taken in appeal to this Tribunal by the department and such appeals of the department were disposed of by this Bench as per Final Order Nos. 278 to 313/2002 dated 18.3.2002, whereby the matters were remanded for de novo consideration by the Commissioner (Appeals). Pursuant to such remand, the Commissioner (Appeals) passed fresh orders against the assessees, which are presently under challenge before us in Appeal Nos. C/153/2003, C/174/2003, C/221/2003, C/238/2003, C/10/2004 and C/242/2004. The appeals filed by M/s. Hi -Tech Arai Ltd., M/s. GEC Alstom Ltd., M/s. Alstom Ltd. and M/s. Boss Profiles Ltd. against the SVB decision were dismissed by the Commissioner (Appeals) and consequently their appeals are also before us [C/07, 189, 241 and 139/2004].

(3.) SHRI N. Venkataraman, Senior Advocate, as leading counsel for the assessees, pointed out, at the outset, that the lower appellate authority had not established that the transfer of technical know -how or the rendering of the technical assistance by the suppliers of the imported components/raw material to the appellants was a condition of sale of such goods, for purposes of Rule 9(1)(c) of the Customs Valuation Rules, 1988. Further, he stated 3 distinct factual situations arising out of these cases and submitted that, on all such factual situations, the valuation issue was already covered by judgments of the apex court. The following are the factual situations mentioned by learned Counsel: