JAY USHIN LTD. Vs. CC (IMPORT), CHENNAI

JUDGEMENT

(1.) THE issue involved in this appeal, filed by M/s. Jay Ushin Ltd., is whether the technical information and know -how fee is to be added in the assessable value of the goods imported by them. Shri R.P. Singh, learned Advocate, mentioned that the Appellants manufacture Key sets and multifunction switches for use in automobiles; that the Appellant Company is a joint venture of M/s. Yushin Co. Ltd., Japan and M/s. Jay Industries, Delhi; that with the object of obtaining the necessary know -how for manufacturing key sets and multi -functions switches, they entered into a Technical Assistance Agreement with M/s. Shing Chang Electric Co. Ltd., Korea on 27.10.1997 whereby the Korean Company granted to them exclusive right and license to manufacture, use and sell these items in India, on payment of Technical Information and know -how fees of one lakh U.S. dollars in three installments; that the Appellants were also obliged to pay the foreign company equal to 3% of the sale of these items to be manufactured in India by the Appellants; that after the matter having been remanded by the Tribunal vide Final Order No. 627/2002 dated 28.5.2002, the Commissioner (Appeals), under the impugned Order has held that the Appellants are related to M/s. Yushin under Rule 2(2)(ii) and 2(2)(v) of the Customs Valuation Rules, M/s. Shing Chang Electric Co. Ltd. is either a parent company or subsidiary company and is deemed to be related to the Appellants and that one lakh U.S. $ shall be added to the value under Rule 9(1)(c) of the Customs Valuation Rules.

(2.) THE learned Consultant submitted that as the goods have been imported by the Appellants from M/s. Shing Chang and not from M/s. Yushin, relationship between Yushin and the Appellants has no bearing on valuation of the goods; that the finding of the Commissioner (Appeals) that M/s. Shing Chang is either a parent company or subsidiary company is not correct as no benefit of joint venture agreement has been transferred to M/s. Shing Chang nor the Commissioner (Appeals) has identified as to which of benefits had been transferred; that further the joint venture agreement nowhere bar souring of technology by the Appellants from some other source; that as per Article 7 of the Joint Venture Agreement, 'Parent Company' or 'Subsidiary Company' mean a company which owns, controls or is owned or controlled the majority voting stocks of or by the either party; that there is nothing on record to show that this condition is fulfilled, i.e., M/s. Shing Chang Electric Co. Ltd. owned, controlled majority voting stock or such stock was owned or controlled by the Appellants; that moreover there is no relationship whatsoever between Shing Chang and Yushin; that there had been no business dealings between the two companies; that thus Shing Chang is neither a parent company nor a subsidiary company; that the impugned Order is based on assumption and presumption which is not sustainable in law; that as there is no mutual interest in the business of each other, they cannot be treated as related person.

(3.) COUNTERING the arguments, Shri S.M. Tata, learned SDR, reiterated the findings as contained in the impugned Order.