COMMISSIONER OF CUSTOMS versus M/S FERODO INDIA PVT. LTD.

COMMISSIONER OF CUSTOMS versus M/S FERODO INDIA PVT. LTD.

On reading the technical assistance and trademark agreement in entirety, there was no nexus between royalty/licence fees payable for know-how and the goods imported for manufacture of licensed products. Therefore, such payments are not includible in the price of imported goods under Rule 9(1)(c). The Department must...

Source-derived case information.

Parties
Appellant: Commissioner of Customs; Respondent: M/S Ferodo India Pvt. Ltd.
Jurisdiction
India
Judgment Date
21 February 2008
Procedural Posture
Civil Appeal / Final Judgment on Appeal From Customs, Excise & Gold (control) Appellate Tribunal
Outcome
Appeals dismissed
Legal Topics
Customs Valuation, Royalty and Licence Fee, Transaction Value, Technical Know How
Customs Law Customs Valuation Royalty and Licence Fee Transaction Value Technical Know How

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Parties

Commissioner of Customs

Appellant

M/S Ferodo India Pvt. Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Judgment on Appeal From Customs, Excise & Gold (control) Appellate Tribunal

Legal Issues

  1. 1 Whether technical know-how fees and royalty payments should be added to the value of imported goods under Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, Rule 9(1)(c) and Rule 9(1)(e).

Ratio Decidendi

On reading the technical assistance and trademark agreement in entirety, there was no nexus between royalty/licence fees payable for know-how and the goods imported for manufacture of licensed products. Therefore, such payments are not includible in the price of imported goods under Rule 9(1)(c). The Department must examine both price arrangements and the Consideration Clause; finding no connection, the Tribunal's order is correct.

Court Disposition

Appeals dismissed

Orders

  • Civil appeals filed by the Department are dismissed.
  • No order as to costs.