9911796707
TMI Blog2012 (12) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... p;The facts arising for consideration in this case are as follows : 2.1 The Directorate of Revenue Intelligence, Mumbai Zonal Unit received an intelligence that M/s. Sony Pictures Home Entertainment India, the appellant in this case, were engaged in import of recorded media containing foreign feature films for which they have paid huge amounts to overseas suppliers towards licence fee to exploit the VCD/DVD rights for a certain period of time. The payment made to the foreign supplier was not declared to the Customs authorities at the clearance of such feature films imported in the form of Digi beta tapes leading to under-assessment of value and short-payment of duty. 2.2 Accordingly, investigation was conducted and the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value for customs duty purposes. 2.3 Accordingly, a show cause notice dated 5-3-2009 was issued to the appellant proposing to reject the transaction value declared by the appellant at the time of importation of the recorded media and proposing to include the royalties paid to the foreign supplier in the assessable value of the goods imported under the provisions of Rule 9(1)(c)/Rule 10(1)(c) of the Customs (Valuation) Rules, 1988/Customs (Valuation) Rules, 2007. The notice also proposed to demand differential duty amounting to Rs. 1,85,63,704/- from the appellant under the provisions of proviso to Section 28(1) of the Customs Act, 1962 and interest thereon under Section 28AB ibid. The notice further proposed to confiscate the record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position he contends that the royalty paid are not liable to be included in the assessable value of the goods imported under the provisions of Rule 9(1)(c)/10(1)(c) of the Customs Valuation Rules, as it stood at the relevant time. He further points out that any payments made for reproduction of the goods in India is not liable to be included as per the provisions of aforesaid Rules. 4. The learned Additional Commissioner (AR) appearing for the Revenue, on the other hand, argues that the said amount of royalty is paid to the foreign supplier is liable to be included in the assessable value of the goods imported in terms of provisions of Rule 9(l)(c)/10(l)(c) of the Customs Valuation Rules as such payments are a condition of sale for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of film but only the cost of media in which the film is recorded and the same is not the value of the goods imported. The Hon'ble Apex Court in the case of Living Media India case, cited supra, in the case of pre-recorded music cassette, held that, "if a pre-recorded music cassette or a popular film or musical score is imported into India, duty will necessarily have to be charged on the value of the final product. As per Rule 9, in determining the transaction value, there has to be added to the price actually paid or payable for the imported goods, royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of sale of goods. Therefore, when prerecorded music cassette is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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