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TMI Blog2017 (3) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... giving the deductions mentioned in the Rule 7. With this finding the matter deserves to be remanded to the original adjudicating authority. Whether duty is liable to be paid on the royalty? - Held that: - the royalty paid and payable for the goods imported through link is to be taken into account for the purpose of assessable value. However, there is premise that the goods imported through link, that is through internet, which are called download and which may be sold by the importer appellant cannot be subjected to the Customs duty. The downloads imported through link or through internet are not the subject matter of present proceedings - For the present proceedings when downloads through internet are not the subject matter no comments of the Tribunal on the same are called for. Appeal allowed by way of remand. - C/50155/2015-CU[DB] - C/A/52316/2017-CU[DB] - Dated:- 10-3-2017 - Mr. S.K. Mohanty, Member (Judicial) And Mr. Ashok K. Arya, Member (Technical) Mr. Shri Tarun Gulati Sparsh Bhargva and Anupam Mishra, (Advocates) for the Appellant Mr. Govind Dixit for the Respondent ORDER Per Ashok K. Arya Encyclopaedia Britannica India Pvt. Ltd. is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustains the order of the Deputy Commissioner. Hence the appellant importer is in appeal before the Tribunal against Commr (Appeals) order. 6. The appellant has been represented by ld Advocates, Sarva Shri Tarun Gulati, Sparsh Bhargva and Anupam Mishra and Revenue has been represented the Ld. AR, Shri Govind Dixit. 7. Based on the appeal memorandum and written submissions the ld Advocates for the appellant inter-alia submits as under. i. the issues involved are: a. Valuation of imported CDs/DVDs under Customs. b. Levy of customs duty on royalty paid for online download of education content for replication of CDs/DVDs in India. ii Appellant submits that the conditions given under Rule 3(3) of Customs Valuation Rules have been satisfied. Merely because parties are related, it does not amount to under valuation. CC, Mumbai Vs Clariant (India) Ltd. 2007 (201) ELT 481 (SC). iii. Resale price of imported goods in India cannot be a basis for questioning the valuation of imported goods CC, Chennai Vs. Shakti Trading Co., 2003 (160) E.L.T 225 (Tri. Chennai) Impex Steel Bearing Co. V CC, Delhi-IV, 2014 (302) E.L.T. 464 (Tri. Del) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sellers in India, subject to certain deductions. For better appreciation Rule 7 (1) of CVR, 2007 is given below:- Rule 7. Deductive value.- (1) Subject to the provisions of rule 3, if the goods being valued or identical or similar imported goods are sold in India, in the condition as imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on the unit price at which the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deductions : - (i) either the commission usually paid or agreed to be paid or the additions usually made for profits and general expenses in connection with sales in India of imported goods of the same class or kind; (ii) the usual costs of transport and insurance and associated costs incurred within India; (iii) the customs duties and other taxes payable in India by reason of importation or sale of the goods. 7.1 In this regard the ld. AR for the Revenue merely refers to unit price at which import goods are sold and not to the gre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price at which the imported goods were institutionally sold has been decided, the deductive value is to be arrived at after giving the deductions mentioned in the Rule 7. With this finding the matter deserves to be remanded to the original adjudicating authority. Both sides agree that valuation is to be arrived at under provisions of Rule 7 of CVR read with subsection 14(1) of the Customs Act. In the light of the findings given here the adjudicating authority shall decide the matter denovo after giving the necessary opportunity of personal hearing and submission of documents to both the sides. 8. The other issue is- whether the royalty paid or payable is to be included in the assessable value . In other words issue is whether duty is liable to be paid on the royalty. The lower revenue authorities have held that Revenue is to take into account the royalty at the rate of 5% of net sales revenue for inclusion in the assessable value. 8.1 It is on record that the importer appellant makes the payment of royalty of 5% of their net sales revenue of CD/DVDs. The Order-in-original passed by Deputy Commissioner refers to it in its Para 6 saying that the Royalty Agreement dated 01.04.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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