2023 (6) TMI 1089 - AT - Customs

Valuation of goods imported from few related parties of the appellant - whether the loading of the amounts of royalty paid to their different entities in terms of 10 agreements in the Bills of Entry, as per the SVB Mumbai order dated 19.6.2008 is in order? - HELD THAT - The SVB order dated 19.6.2008 has been set aside and the present issue has now been settled in their favour by the Tribunal s Final Order 2012 (11) TMI 571 - CESTAT MUMBAI . The present issue in the impugned order deals with the 10 agreements based on which the value has been loaded. Since the original Mumbai SVB order dated 19.6.2008 itself stands set aside all orders based on that will have to be set aside. Appeal allowed.

Summary

Issues involved: Valuation of goods imported from related parties, loading of amounts paid as royalty in assessable value, appeal against assessment orders based on SVB order, nexus between royalty payment and import of components.

Valuation of goods imported from related parties:
The appellant filed an appeal against the impugned Order-in-Appeal No.29/2010 dated 22.02.2010 passed by the Commissioner of Customs (Appeals), Bangalore. The dispute revolved around the valuation of goods imported from related parties, specifically the loading of amounts paid as royalty in the assessable value based on the SVB Mumbai order dated 19.6.2008. The Commissioner (A) upheld the assessment order passed by the Assessing Officer, stating that there was no infirmity in the action which warranted interference. The appellant contended that the loading of royalty amounts was not justified as per a Tribunal's Final Order in their favor in a similar case.

Loading of amounts paid as royalty in assessable value:
The issue at hand was whether the loading of amounts paid as royalty to different entities based on 10 agreements in the Bills of Entry, as per the SVB Mumbai order dated 19.6.2008, was appropriate. The appellant argued that a Tribunal's Final Order dated 30.10.2012 had settled the issue in their favor, stating that royalty should not be loaded in the transaction value as there was no nexus established by the Revenue between royalty payment and import of components. The Tribunal found that the SVB order dated 19.6.2008 had been set aside, and in line with the appellant's case, the impugned order was set aside, allowing the appeal with consequential relief.

Appeal against assessment orders based on SVB order:
The appellant had previously appealed the SVB Mumbai's order dated 19.6.2008 to the Commissioner (A), Mumbai, who remanded the matter to the Original Authority for a fresh order. The Department also filed an appeal, leading to subsequent orders and appeals before the Tribunal. Ultimately, the Tribunal's Final Order dated 30.12.2012 allowed the appellant's appeal, indicating inconsistencies in the assessment orders based on the SVB order.

Nexus between royalty payment and import of components:
The Tribunal's Final Order No. A/673/2012-WZB dated 30.10.2012 highlighted the lack of nexus between royalty payment and import of components in the agreements. It was noted that the appellant was not obligated to import components from the collaborator, and the payment of royalty was not contingent on importing components from the licensor. The Tribunal emphasized that without evidence establishing a connection between royalty payment and imported components, adding royalty to the transaction value for assessable value calculation was unwarranted.