Home Case Index All Cases Customs Customs + AT Customs - 2013 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (10) TMI 36 - AT - CustomsAssessable Value of Goods inclusion of fee payable by the appellants for the Sole Distribution Rights - Held that - Relying upon Commissioner of Customs Versus M/s Ferodo India Pvt. Ltd 2008 (2) TMI 12 - Supreme Court - sole distribution fee payable under the agreement cannot be includible under Rule 10(1) (d) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - The value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller was includible in the assessable value. The contention of the appellant was that this fee payable by the appellants for the Sole Distribution Rights which facts the ld. Commissioner (Appeals) also did not dispute in his order - the department could not bring out any evidence that above amount was any part of proceeds of any subsequent resale, disposal of use of imported goods - the amount of ₹ 4.963 corres per annum sought to be loaded to assessable value was towards Sole Distribution Rights fees and the amount and its determination was a mechanism to determine the quantum of fee - the department could not show any evidence that the aforesaid fee was liable to be loaded in terms of Rule 10(1) (d) order set aside Decided in favour of Assessee.
Issues:
1. Valuation of imported goods for customs purposes based on distribution rights fee. Analysis: The appellants filed an appeal against the Commissioner of Customs' order regarding the valuation of imported goods, which included promotional materials and 'Audi' brand FBUs. The case was referred to the SVB branch for valuation due to a relationship with the supplier. The lower authority ordered loading of the declared value by 3.15% and additional amounts based on Customs Valuation Rules. The Commissioner (Appeals) upheld this decision, leading to a writ petition in the Bombay High Court. The High Court set aside the order, requiring a fresh decision. The Commissioner then included Rs. 4.963 crores per annum in the assessable value, prompting the current appeal. The appellants argued that the distribution fee paid to Audi AG was fixed annually, regardless of profit, and not linked to the sale proceeds. They contended that this fee should not be included in the assessable value. The department claimed the fee was determined based on projected profits. The Tribunal examined Rule 10(1)(d) of the Customs Valuation Rules, which includes proceeds accruing to the seller from subsequent resale or use of imported goods. The department failed to prove that the fee was part of such proceeds. The Tribunal agreed with the appellants that the fee for distribution rights was not covered by Rule 10(1)(d) and set aside the Commissioner's decision. In conclusion, the Tribunal found that the distribution fee for sole rights was not to be included in the assessable value of imported goods. The Commissioner's decision to load Rs. 4.963 crores per annum was deemed unsustainable, and the appeal was allowed in favor of the appellants.
|