Commissioner of Customs Vs Indo Rubber And Plastic Works (Supreme Court of India)
The Hon’ble Supreme Court of India in The Commissioner of Customs v. M/s Indo Rubber and Plastic Works [Civil Appeal No. 3685/2020 dated July 01, 2021] dismisses Revenue’s Special Leave Petition (SLP) against the Customs Excise and Service Tax Appellate Tribunal (CESTAT) order which had held that marketing, advertising, sponsorship and promotional expenses/payments made by the assessee (importer) for promotion of brand is not includible in assessable of imported sports goods and thus, Rule 10(1)(e) of Customs (Determination of Price of Imported Goods) Rules, 2007 (Customs Valuation Rules) is not invokable.
Facts:
M/s Indo Rubber and Plastic Works (“the Assessee”) is engaged in importing and distribution of sports goods of ‘Li Ning’ brand of sport goods like Badminton Racquets, shuttles, shoes, clothes, bags etc. from M/s Sunlight Sports Pte. Ltd., Singapore (“the Exporter”).
The Assessee entered into distribution agreement with the Exporter for the purpose of import and sale of ‘Li Ning’ branded sports goods within India (except Tamil Nadu, Andhra Pradesh and Kerala).
The Commissioner of Customs (“the Revenue”) alleges that marketing, advertising, sponsorship and promotional expenses/ payments made by the Assessee to promote the ‘Li Ning’ brand was a condition of sale and consequently such amount was liable to be included in the value of the imported goods in terms of Rule 10(1)(e) of the Customs Valuation Rules.
The CESTAT set-aside the Revenue’s order confirming duty demand, and entitled assessee to consequential benefits, including refund of amount deposited during investigation and also noted that the amount deposited had taken character of pre-deposit under Section 129E of the Customs Act,1962 for which the Assessee would be entitled to interest on the refund amount.
Revenue aggrieved by the CESTAT order filed SLP before the Apex Court.
Issue:
