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28. From the above it is evident that the basic engineering and design supplied by TSDN to CCI relates to lay out drawings of the palm oil plant, assembling and drawing of palm oil plant. Clause 3 of Appendix I provides a complete list of documentation, specifications, piping, valve, instrumentation for the entire setting up of the palm oil plant. Nowhere in the MoU there is any mention that the design, basic engineering designs are related to the imported goods in question. It is pertinent to state that the appellant GAVL has entered into contract with SCI vide No.1182 dated 28.11.1997. As per this contract, they placed revised purchase order dated 9.3.1998. As per this contract between GAVL and SCI, the supply of equipment to be made in India for an amount of Rs.1.92 crores, technical know-how fee of Rs.50 lakhs, the detail engineering of Rs.27.32 lakhs. On perusal of the terms and conditions the original contract order No. 1182 dated 28.11.1997 as per Annexure VIII of the contract lists out various clauses including technical know-how, equipment, plant layout and detail engineering at S. Nos. 20 to 25 explains the list of details of engineering which is reproduced under:-
25) Detailed pipes and valves specifications
a) Process lines
b) Utility lines
c) ETP
29. From the above specifications, it is evident that the basic engineering clearly relates to complete lay out designs of palm oil plant set up by SCI. By virtue of assignment vide letter dated 15.6.1998 as submitted by the appellant in reply to show-cause notice the original purchase order No. 1182 was entered with SCI has been assigned to CCI as CCI had technical collaboration with TSDN. From the above purchase order 1182 and letter of intent dated 9.3.1998, established that the basic engineering charges is not exclusively related to designs supplied by TSDN for setting up of palm oil plant but includes the designs prepared by CCI in India which is termed as workshop designs which based on the basic engineering design supplied by TSDN.
30. We also find that the entire designing of palm oil plant and lay out consist of both indigenous as well as imported and majority of the equipments are indigenously procured or made by CCI as per their own design. Except these three equipments which are imported by the appellant from TSDN, all other equipments and structurals were built indigenously. Therefore, it is apparent that the fee paid towards basic engineering is not related to TSDN but it includes for the designing done by CCI. We also perused the designs, drawings which is appended to the appeal memorandum. On a perusal of the drawings and designs, we find that the designs are related to complete construction and layout of palm oil plant with flow diagrams, flow chart and layout of each plant and machinery in the palm oil plant. Therefore, we hold that basic engineering designs charges paid by the appellant to CCI cannot be construed that the entire design fees has been in-turn paid back to TSDN by CCI.
(i) materials, components, parts and similar items incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the production of the imported goods;
(iii) materials consumed in the production of the imported goods;
(iv) engineering, development, art work, design work and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods As evident from the above provisions, Rule 9 is invocable for adjustment of the price if it is not included in the transaction value. Clause 9(1)(b)(i)(ii) and (iii) are not relevant to the present issue. Clause (iv) relates to engineering, development, art work, design work and plans and sketches undertaken elsewhere than in India and necessary for the production of the imported goods. As we have already explained above, the basic engineering and design charges paid are clearly related to setting up of plant and not related to manufacture or production of the imported goods. Revenue contended that TSDN Malaysia is not the actual manufacturer of the said equipments and they in turn got the goods from others based on the design supplied by TSDN. On perusal of the letter dated 8.9.1998 (Ref. page 187) written by TSDN to the appellant, it is evident that the supplier clearly confirmed that the imported equipments are tailor made for the appellant plant based on their design and engineering. The value of the equipment is as per the invoice. TSDN also confirmed that the original manufacturer invoice from whom the TSDN procured the said equipment are not applicable. From this it is evident that even if TSDN has provided the design for manufacture of the imported equipment to original manufacturer at Malaysia, the invoice price of TSDN is inclusive of all cost and designs etc. In the absence of any other vital corroborative evidence that the appellants have paid separately to the supplier towards the design charges for manufacture of the said imported equipment at Malaysia, the invoice price is to be accepted as transaction value for the purpose of assessment. We have already held that the basic engineering fee charges paid by the appellant to CCI are not related to the imported goods. In this regard, we rely on the decision of the Honble Supreme Court in the case of TISCO Vs. CCE (supra) wherein the Honble Supreme Court has held that drawings and documents used for construction, erection and assembling are not includible in the assessable value. The relevant paragraphs are reproduced as under:-