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TMI Blog2018 (4) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... e of institutional advertising and promotional campaign - Held that: - the appellant is required to remit an amount @ 2% and unless such amounts are paid, they will not be entitled to import goods from the foreign principal - such payments come within 10(1) (e), since such payments are being made as a condition of sale of the of the imported goods - demand upheld. Loading @ 3% of the value of purchase - Held that: - Such expenditure is incurred after import of the goods. Even though, the appellant is required to incur such expenditure as per the agreement with the foreign principal, it cannot be said that such expenditure has been incurred to satisfy the obligation of the foreign principal - the condition specified in Rule 10 (1) (e) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... humita, ld Advocates for the appellant as well as Sh Amresh Jain, DR representing Revenue. The ld Advocate assailed the impugned order mainly on the following grounds: a) Loading of the invoice value @ 5% for franchise fee is not sustainable since it is in the nature of royalty which has been held to be not includible by the Tribunal in the case of M/s Thyssenkrupp Elevator (I) P. Ltd-2017(356) ELT 249 (Tri.Del.). b) Loading @ 2% has been ordered towards the appellant s share of institutional advertising. This is nothing but a share of the cost of worldwide advertising and cannot be considered as amount paid for the import of goods and hence such loading is not justified. c) Loading @ 3% was ordered on account of advertising expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lves whether the invoice value is acceptable, in terms of Rule 3 (3) (a) of the Valuation Rules. It has been concluded that the invoice values need to be loaded on three different grounds discussed supra. 7. Rule 10 of the Customs Valuation Rules provides for additions to the transaction value of various types of costs and services subject to certain conditions. We extract below the relevant portions of Rule 10 for proper appreciation: Rule 10. Cost and services.- (1) In determining the transaction value, there shall be added to the price actually paid or payable for the imported goods,- (a) (b) (c) royalties and license fees related to the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey will not be entitled to import goods from the foreign principal. Hence, we are of the view that such payments come within 10(1) (e), since such payments are being made as a condition of sale of the of the imported goods. Hence, we uphold the loading of amount @2% as held by the lower authorities. 10. Lastly, we consider the loading @ 3% of the value of purchase. As per the agreement with the foreign buyers, the appellant is required to incur an expenditure not less than 3% towards advertising in India. Such advertisement is carried-out in India for promotion of Giorgio Armani Brands. Such expenditure is incurred after import of the goods. Even though, the appellant is required to incur such expenditure as per the agreement with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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