9911796707
TMI Blog2014 (12) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier outside India. On 6-2-2009 (as the imports are being made from the related supplier), the matter was referred to SVB and it was ordered that the transaction value has not been influenced being a related person and the said order was accepted by the revenue vide order dated 21-5-2009. The periodical review after three years was done. As per order dated 2-2-2012, it was ordered to load the declared invoice value by 8.5% for the year 2010-11 and 18.86% for the year 2011-12 upto 30-11-2011 in the case of imports made from the related supplier. It was further ordered that all assessments which have been made final during the year 2010 to 30-11-2011 may be taken up with suitable demands in terms of Section 28(4) of the Customs Act, 1962 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant is not paying any royalty to their foreign supplier on trading activity, the loading of value is unjustified. He further submits that on capital goods no royalty is being paid, therefore the question of loading of the value does not arise. 5. He further submits that with regard to the raw material, as per the Rule 10(1)(c) of Customs Valuation Rules, 2007, there is no pre-condition of sale of the imported goods to pay royalty as per the agreement. Therefore, the loading of 12% on the transaction value is unjustified as per the decision of the Tribunal in the case of Tata Yutaka Autocomp Ltd. - 2013 (294) E.L.T. 467 (T-Mum) and Bridgestone India P. Ltd. - 2013 (292) E.L.T. 403. 6. On the other hand, ld. AR opposed the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Tata Yutaka Autocomp Ltd. (supra) wherein this Tribunal as held as under :- "5. We have carefully considered the submissions of both the sides and examined the agreement on the basis of which royalty of 3% has been paid by the appellant to their parent company. Article 14.1.2 of the terms and conditions of the agreement is reproduced below : "In consideration for the rights and licenses granted or provided by LICENSOR to LICENSEE hereunder, LICENSEE shall pay LICENSOR royalties on all products manufactured and sold or otherwise disposed of by it hereunder within India at the rate of three percent (3%) of their "Net Selling Price" and at the rate of three percent (3%) of the Net Selling Price on for export sales, if any, of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like to emphasise the word indirectly in Rule 9(1)(c). As stated above, the buyer/importer makes payment of the price of the imported goods. He also incurs the cost of technical know-how. Therefore, the Department in every case is not only required to look at TAA, it is also required to look at the pricing arrangement/agreement between the buyer and his foreign collaborator. For example if on examination of the pricing arrangement in juxtaposition with the TAA, the Department finds that the importer/buyer has misled the Department by adjusting the price of the imported item in guise of increased royalty/licence fees then the adjudicating authority would be right in including the cost of royalty/licence fees payment in the price of the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by TAA alone. On reading TAA in entirety, we are of the view that there was no nexus between royalty/licence fees payable for the know-how and the goods imported for the manufacture of licensed products. The Department itself has invoked Rule 9(1)(c)." and in Bridgestone India P. Ltd. (supra) wherein this Tribunal has held as under :- "7. We have perused the Licence and Technical Assistance Agreement dated 1-4-2005 entered into between the importer and the appellant-collaborator. Clause 8(1) of the agreement deals with the payment of royalty which reads as follows : "8.1 : In consideration of the technical assistance made available by the Licensor to the Licensee pursuant to Article 2 hereof, and the license granted by the Licensor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods but on the goods manufactured and sold in India. Rule 10(1)(c) of the Customs Valuation (Determination of Value of the Imported Goods) Rules, 2007 says that in determining the transaction value, there shall be added to the price actually paid or payable for the imported goods, royalties and licence fees related to the imported goods which the buyer is required to pay directly or indirectly as a condition of sale of the goods being valued to the extent that such royalties and fees are not included in the price actually paid or payable. In other words, the payments made should be related to the imported goods and such payments are condition of the sale of the goods. In the present case, from a reading of the agreement, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
