Royalty cannot be included in Transaction Value under Customs Valuation Rules, 2007, Once Arm’s Length Price Accepted

Schunk Metal and Carbon (India) Private Limited Vs Commissioner of Customs (CESTAT Bangalore) Introduction: In a significant decision, CESTAT Bangalore addressed the inclusion of royalty in transaction value under Customs Valuation Rules 2007. The case, Schunk Metal and Carbon (India) Private Limited vs. Commissioner of Customs, focused on arm’s length pricing and the validity of adding 5% royalty under Rule 10(1)(c) of the Customs Valuation Rules. Detailed Analysis: M/s. Schunk Metal and Carbon India Pvt. Ltd. imported materials from associated companies, with accepted transaction valu...