9911796707
TMI Blog2013 (4) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... onite South Asia Pvt. Ltd. imported capital goods, raw materials and finished products, (travel goods), etc., from their collaborator M/s. Samsonite Corporation, USA, for the manufacture of travel goods in India. Ongoing through the financial statements for the year 2007-08 & 2009 it was noticed that the appellant had incurred expenditure in foreign currency towards advertising. A clarification in this regard was sought from the appellant. The appellant clarified that the expenses pertain to their share in global advertising undertaken for all the Samsonite companies situated in various countries. As a part of international group, dealing in with identical branded products across the globe, the development of advertising and publicity campa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as ordered that the value of the imports made by the appellant shall be loaded either on proportionate basis or on a one time basis by including the cost of global advertisement expenses shared by the appellant. The appellant preferred an appeal against the said decision before the lower appellate authority, who dismissed the appeal and hence, the appellant is before us. 4. The ld. Counsel for the appellant submits that the cost of advertisement shared by them with Samsonite Hong Kong has nothing to do with the import of goods, such as raw materials, components or finished products from various Samsonite group entities. The said expenses were towards advertising material development by Samsonite Hong Kong for global advertising purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to satisfy an obligation of the seller to the extent that such payments are not included in the price actually paid or payable can be added to the transaction value for its determination. In the present case, the payments are made to Samsonite Hong Kong who has undertaken global advertising campaign whereas the imports are from various other Samsonite group entities on account of the advertising campaign, the appellant also benefits apart from the other group entities. If the expenditure had been incurred by the appellant himself, the question of adding the cost of advertisement in the value of the imported goods would not have arisen. Merely because the appellant had shared the cost for the global advertising campaign, the benefit of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred on advertising has no influence or nexus with the import of raw materials. Where the exporter under a corporate advertising plan reimburses the importer for the part of its advertising expenses, such payments only reduces his net expenses for advertising which is not a dutiable item in the first place. If the charge is not based on the number of units of the products imported, such a cost sharing arrangements cannot be regarded as an indirect payment constituting an additional element of the price paid by the importer to the exporter. In the present case, we find that there is no nexus between the imports made by the appellants and the expenditure shared by the appellants for the global advertising campaign. We also find that the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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