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TMI Blog2016 (11) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... at all import the same from the related foreign supplier. In such a situation, the condition that the payment of royalty is relatable to the imported goods and is a condition for sale of goods cannot be sustained in law. Thus, there is no nexus between the royalty payment and the import of components. The finished goods are manufactured by Technical knowhow from sister/related company; nothing was brought to notice that the agreement for technical know how between the importer respondent and their related person supplying the goods or finding that raw material needs to be purchased from the related person only. In the absence of any such restrictive Clause, the first appellate authority was correct in coming to a conclusion that the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The grounds for justification of addition of royalty to the transaction value is on the grounds that royalty is computed on -gross sale value excluding duties and taxes only and not the landed cost of the imported components . On this basis, the Adjudicating Authority has held that Royalty Payment. is required to be added proportionately to the assessable value of the imported goods as per the formula reproduced below: % addition to the C.I.f value = total royalty payment in the year X 100 Total Assessable value of the imported goods 10. On going through the relevant Articles/clauses of the Trademarks License Agreement annexed to the Appeal, I find that the 'Licensor (Bekaert, Belgium) has granted the Licensee (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body else. The Licensee is liable to pay royalty to the Licensor (Bekaert, Belgium) even when the licensee (the Appellant) imports the raw material from anybody else and do not at all import the same from the related foreign supplier. In such a situation, the condition that the payment of royalty is relatable to the imported goods and is a condition for sale of goods cannot be sustained in law . Thus, there is no nexus between the royalty payment and the import of components. As against the above recorded factual finding, it is noticed that revenue has not contraverted the fact, that respondent has imported raw materials for manufacture of finished goods. The finished goods are manufactured by Technical knowhow from their sister/relate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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