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TMI Blog2018 (1) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... n the terms of the agreement, it was concluded that the respondent accepted and acquired exclusive distributorship rights for the sale of the imported eyewear products with the express approval of the seller of those goods “Luxottica” subject to the terms and conditions mentioned therein - the payment made by the respondent for the right to distribute or resell the imported goods should not be added to the price paid or payable for such goods, if such payments are not a condition of the sale for export to the country of importation of the said goods - amount not includible. Appeal dismissed - decided against Revenue. - C/COD/50977/2017 with and Appeal No.51841/2017 - Final order No.50245/2018 - Dated:- 18-1-2018 - Mr. (Dr.) Satish Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2(2) and Rule 3, was not in dispute and had not been contested. The dispute is with reference to loading of certain value in the assessable value of imported goods by the respondent. 3. The contents of the two agreements were relevant to the present dispute. The first one is License and Distribution agreement dated 22.04.2008 between Luxottica, Italy and RBSOIL. The agreement granted exclusive licence to the RBSOIL to use the trade mark and technical know how for manufacture and distribution of eyewear products as well as exclusive licence to distribute imported products supplied through the subsidiaries of Luxotica. Another agreement dated 15.03.2010 is a sub-distribution agreement between RBSOIL and the respondent. The respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the Revenue is restricted only to the addition of trademark licence fee of ₹ 5.71 crores in the assessable value in terms of Rule 10(1)(c ) of the Customs Valuation Rules. Accordingly, we are concerned only with this part of the dispute. 5. Ld. AR elaborating the grounds of appeal by the Revenue submitted on the following lines:- (a) The decision of the Original Authority is not correct as the sub-distribution agreement dated 15.03.2010 between RBSOIL and the respondent was entered into with the express approval of Luxottica Group. The various terms of the agreement make it clear that the consideration for being appointed the exclusive distribution of the eyewear products from RBSOIL or the Luxottica group, the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia India Ltd. - 2011 (271) ELT (SC) and Agro Tech Foods Pvt. Ltd.- 2015 (330) ELT 448 (T-M). 6. Ld. Counsel for the respondent strongly contested the grounds of appeal by the Revenue. In the oral as well as written submissions, he emphasized the following points:- (a) The Original Authority carefully examined the facts of the case, agreements and other materials on record and applying the provisions of Rule 10(1)(c) of the Valuation Rules held categorically that payment for distribution rights had no relationship to imports. (b) The consideration paid by the respondent to RBSOIL is for being appointed as a sub-distributor and not towards any fee or royalty. (c) The reliance placed by the Original Authority on Feroda Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) . (b) (c) Royalties and licence fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable , The reasoning or rationale for the inclusion of the aforesaid trademark licence fee‟ is contained in paragraph 16.6 of the Show Cause Notice which states that this amount was paid as a condition of sale . It has further been stated that the assessee got the rights from RBSOIL which RBSOIL got from Luxottica Sra Itlay. This amount though is not being paid directly to Luxottica Sra Itlay but being paid to RBSO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make up for that. It is clear that payment of licence trade mark fee by the respondent to RBSOILwould not merit as indirect payments within the ambit of Rule 10(1)(c). 10. One of the conditions for addition of value under Rule 10(1)(c) is that payment of licence fee should be condition of the sale of the imported goods . This aspect has been examined in great detail by the Original Authority. Relying on the terms of the agreement, it was concluded that the respondent accepted and acquired exclusive distributorship rights for the sale of the imported eyewear products with the express approval of the seller of those goods Luxottica subject to the terms and conditions mentioned therein. We note that the Original Authority correctly con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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