The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), observed that Technical know-how fees need not be included in the assessable value of imported goods. The respondent in the present matter is M/s Diabu Diamond Tools (I) Pvt Ltd.
R. Rajaraman appeared and argued for the Department. It is submitted by him that as per the periodical review, the earlier Order was taken up by the Special Valuation Branch. In the said order, it was directed to include the fee of EURO 40,000 for the transfer of technical know-how in the assessable value on import of new capital goods.
After verifying the documents, the Special Valuation Branch passed Order directing to accept the invoice value for assessment purposes and to add a technology transfer fee of EURO 40,000 to the invoice value on importation of the new capital goods by the importer and thus maintaining the earlier order.
The respondent-importer thereafter filed an appeal before the Commissioner (Appeals) who after verifying the collaboration agreement has held that the technical knowhow fee of EURO 40,000 is not related to the import of capital goods and there is no stipulation and it is a condition for sale of the import of capital goods. The order was thus modified by the Commissioner (Appeals) directing not to include the technical know-how fee to the assessable value.
N. Anand appeared for the respondent. It was submitted that when the case was taken up for periodical review it is correct that the respondent had submitted that there is no change in the pricing pattern or the collaboration agreements. However, from the collaboration agreement itself, it is clear that the transfer of technical know-how is not a condition for the sale of the goods. This being so, the said amount cannot be included in the invoice value.
The Bench comprising Sulekha Beevi C.S, Judicial Member and M Ajit Kumar, Technical Member observed that “After appreciation of facts and the evidence placed before us, we are of the considered opinion that the view of the Commissioner (Appeals) that technical knowhow fee of EURO 40,000 need not be included in the assessable value of imported goods is legal and proper.”
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