Per P.G. Chacko :

The appellants, in the year 1994, entered into an agreement with M/s. Southwire Company, USA for purchase of machinery and equipments (hereinafter referred to as the capital goods) for manufacture of electrolytic copper rods and, accordingly, imported the capital goods in 1995. They had already entered into a Technical Assistance Agreement on 18.09.1993 with M/s. Taihan Electric Wire Co. Ltd., Korea. The various items of the capital goods were covered by invoices Nos. 1599-A and 1599-B issued by the foreign suppliers. An amount of US $ 15 lakhs was charged on the appellants by M/s. Southwire Company towards "engineering and service charges" as per invoice No. 1599-C. The imported capital goods were intended for use for a process of manufacture termed "SCR-2000 copper system". As per the contract between the appellants and M/s. Southwire Company, the latter would provide engineering services (Item-P under agreement dated 11.01.1994), operational training in USA (Item-Q), user licence (Item-R) and field services and start-up assistance (Item-U). These items were covered by "engineering and service charges" mentioned in invoice No. 1599-C ibid and the amount paya