Owens Corning Industries (India) Pvt. Ltd Vs Commissioner of Customs (Seaport) (CESTAT Chennai)
CESTAT Chennai held that royalty fixed at percentage of net sales is not includible in transaction value of goods imported under rule 10(1)(c) of the Customs Valuation Rules, 2007 as royalty paid is not related to imported goods. Accordingly, appeal of assessee allowed.
Facts- The appellant applied for renewal of the SVB order in The Deputy Commissioner of Customs (SVB) after considering the submissions made by the Appellant passed Order-in-Original No.14237/2011 dated 21.01.2011 and held that the transaction value is acceptable in terms of Rule 3 (3) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. However, the Deputy Commissioner held that 4% running royalty paid on the net sales value of the manufactured products should be included in the transaction value of the good imported as per Rule 10 (1) (c) of CVR, 2007.
Commissioner of Customs (A) upheld the said contention. Accordingly, being aggrieved, the present appeal is filed.
Conclusion- Held that the imported goods in this case are not procured from the Group Company and nor do we find any condition to the effect that these goods shall be sold only upon payment of Royalty. In fact, the Agreement also provides a leverage to the appellant in case of any damage or the non-selling of goods, charging back, etc. and hence, the payment of Royalty is fixed at 4% of the Net sales. Thus, there was no requirement to add Royalty to the price of imported goods as done by the Commissioner in this case and hence, the impugned orders cannot sustain.
