JUDGMENT

Sen, J.-Modi Rubber Limited, the appellant herein, set up a tyre and tube manufacturing plant in 1974. It had a collaboration agreement with a West German Company (hereinafter referred to as "foreign collaborators") who agreed to supply the latest technical knowhow and also to guide the appellant in the manufacture of high quality tyres. Some machineries and its components were also supplied by the foreign collaborators. The dispute in this case relates to Polypropylene Liner Fabric (PPLF). According to the appellant, PPLF was supplied by the foreign collaborators for use as Liner components to various machinery units. PPLF is basically a Liner Fabric which protects the rubber coated tyre fabric from atmospheric moisture and dust. The Liner Fabric is fed into various machinery units and at each stage, it is rolled with a layer of the Liner Fabric component in between. This has the effect of protecting and preserving the thickness, surface and elongation etc. during the manufacturing process. The Liner Fabric was an essential part of the working of the machineries. The necessary manufacturing process could not be carried out unless it was used in the various machinery units.