9911796707
TMI Blog2018 (2) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... Per: B. Ravichandran The appellant is aggrieved by order dated 29.09.2010 passed by the Commissioner of Customs (Appeals), New Delhi. The appellant as an associated company of M/s. YKK India pvt. Ltd. was importing regularly parts and components of zippers. Since the appellant is an associated company, the valuation was looked into by the Special Valuation Branch of Customs House. 2. The present dispute is with reference to addition of royalty charges paid by the appellant to the Japan Company, in the assessable value of parts and components of zippers imported by them. The Original Authority vide his order dated 30.10.2009 held that the said royalty was neither a pre-condition of sale nor related to the imported goods and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect rings, button, snap buttons etc.) by YKK Japan has granted a non-exclusive and not assignable license without the right to sublicense, to utilize the trademarks, the patents and know how in connection with the design, manufacture, testing, import, marketing, distribution and sale of the production the territory. For the consideration of license granted, the Importer shall pay to YKK Japan royalty @ 4% of the Net Selling Price of SF products, @ 2% of the Net Selling Price of T P products and @ of the Net Selling Price of S B products. Net Selling Price has been defined as the selling price on the sale of all products manufactured and then sold by the Importer during the royalty computation period (1 st January to 31 st December, less t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be added to the assessable value of the goods imported by their company. 6. The Hon ble Supreme Court in Matsushita Television Audio (I) Ltd. (supra) held as under:- 6. On reading the above agreement, the following features emerge. Under Clause 1.03 the term Net-factory sale price has been defined to mean the sale price billed by the appellants for its products to its customers in normal arm s length transaction exclusive of taxes, freight and insurance, but including the cost of the bought-out components and the cost of the imported components. Under Clause 1.04 the term Technical Know-how was defined to mean technical information required for the manufacture of colour T.V. as specified in Clause 3.01. The tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection and if MEI approves the quality and the specifications of such bought-out components then alone the appellant would be free to use such components in the manufacture of colour T.V. 7. The question which arises for consideration in this civil appeal is : whether royalty payment was connected with the imported components. Under Rule 9(1)(c) of the Valuation Rules, 1988, only such royalty which is relatable to the imported goods and which is a condition of sale of such goods alone could be added to the declared price. However, in the present case, payment of continuing royalty was payable at the rate of 3% of the net ex-factory sale price of the colour T.V. exclusive of taxes, freight and insurance but including the cost of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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