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TMI Blog2024 (10) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... , [ 2007 (4) TMI 5 - SUPREME COURT] referred by the Appellant, it is held that technical know-how and payment of Royalty is includible in the price of imported goods, if the payment constitute a condition pre-requisite for supply of imported goods by foreign supplier. In the present appeal, the facts have clearly proved that the pricing was at arm s length and the relationship had not influenced the price, which has been accepted by the department in past transactions between the same parties. The issue is squarely covered by the decision of the Hon ble Supreme Court in the matter of CC vs M/s Ferodo India Pvt Ltd. Thus Commissioner (Appeals) has rightly held that there is no question of adding the royalty to the transaction value. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity and strictly in terms of license agreement. Thus, appeal was allowed. Aggrieved by said order, present appeal is filed by the Revenue. 3. When the matter came up for hearing, learned Authorised Representative (AR) submitted that determination of value of imported goods is influenced by the relationship, since it is supplied by related parties. The learned AR also submitted that the royalty paid by the appellant is only for licence of technical knowhow for the manufacture of the final product and not for the goods imported for trading activity as held by the appellate authority is contradictory and unsustainable. Learned AR also drew our attention to the Article 1.4 and Article 3.1 of the license agreement dated 08.12.2008, which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 imported components. In other words, the royalty payment was to be computed not only on the domestic element of the net sale price of the colour T.V. but also on the cost of imported components. A bare reading of the agreement shows that payment under the said agreement related not only to the production of the goods in India but also to imports. In some of the decisions cited on behalf of the assessee, we find that the net ex-factory sale price of the finished products expressly excluded the cost of imported components. On the other hand, in the present case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is related to or that it is the condition to sale of raw material or finished goods imported by respondent during the relevant period. 7. Learned Counsel for the Respondent also submitted that the Respondent is manufacturing and also trading Automobile/Vehicle safety systems. The supplier, M/s AutoLiv, Sweden had set up the joint venture in 1991 and since 2007, holding 99.99% of the total share in Respondent company. Respondent had approached the SVB and as per the SVB Circular No. 64/1995 dated 25.05.1995, the invoice value of the goods imported by the Appellant was accepted, since it is found that the value at which the imported goods are sold are at arm s length. Thereafter, it is renewed vide Order-in-Original dated 11.04.2003 for a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reover, the issue is squarely covered as per the law laid down by Hon ble Supreme Court in the case of Commissioner of Customs Vs. Ferodo India Pvt. Ltd.-2008 (224) ELT (23) (SC), where it is held that:- Rule 9(1)(c) stipulates that payments made towards technical know-how must be a condition pre-requisite for the supply of imported goods by the foreign supplier and if such condition exists then such royalties and fees have to be included in the price of the imported goods. Under Rule 9(1)(c) the cost of technical know-how is included, if the same is to be paid, directly or indirectly, as a condition of the sale of imported goods. Rule 4(3)(b) of the CVR, 1988 provides for an opportunity for the importer to demonstrate that the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessable value of imported goods by merely relying on the consideration clause of license agreement whereas in the decision in the case of CC, New Delhi vs M/s Prodelin India Pvt Ltd (2006 (202) E.L.T 13 (SC), the Hon ble Supreme Court held that the technical know-how fee charged in respect of post importation activities were not inclusive in assessable value of imported goods. Moreover, the issue is squarely covered by large number of decisions including the following cases: i) Commissioner of Customs Port Chennai Vs. Toyota Kirloskar Motor Private Limited: 2007 (213) ELT (4) (SC) ii) Kruger Ventilation Indus. (North India) Pvt. Ltd. Vs. CC, New Delhi, 2022 (382) E.L.T. 541 (Tri.-Del.) iii) CC, New Delhi Vs. Luxottica India Eyewe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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