2005 (9) TMI 125

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..... am, Vice-President]. - The issue for determination in the above appeal is includibility or otherwise of royalty at the rate of 20% of MRP minus sales tax minus 6.5% packaging deduction payable by the appellants herein who are wholly owned subsidiary of Sony Music Entertainment (India) Inc., USA on sale of imported recorded compact disc in India. The adjudicating authority accepted the transaction .....

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..... is clear that the royalty is payable on net sales in India and this has also not been disputed by the Commissioner. As per Rule 9(1)(c) of the Customs Valuation Rules, 1988, royalty related to the imported goods as a condition of sale of the goods is required to be added to the price actually paid or payable. Interpretative notes to Section 9(1)(c) state that payments made by the buyer for the rig .....

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..... o India and this finding has not been dislodged by the Commissioner (Appeals). Therefore, the appellants are correct in their contention based upon the interpretative notes to Rule 9(1)(c) that the payment of royalty by them to Sony Corporation of America cannot be included in the price of the imported goods. 3. Accordingly, we set aside the impugned order and allow the appeal.
Case laws, Dec .....

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