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Case Law Details

Case Name : Commissioner of Customs Vs Adidas India Marketing Pvt. Ltd. (CESTAT Delhi)
Appeal Number : C Appeal No. 51928 of 2018
Date of Judgement/Order : 05/03/2020
Related Assessment Year :
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Commissioner of Customs Vs Adidas India Marketing Pvt. Ltd. (CESTAT Delhi)

Conclusion: Sponsorship and endorsement expenses paid by Adidas India to various athletes and players in India were not includable in the assessable value of the goods imported by Adidas India by invoking rule 10(1)(e) of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007.

Held: Adidas India was engaged in importing and selling adidas brand products. In terms of the License Agreement entered into between adidas Germany and adidas India, adidas India executed agreements with various sports personalities, clubs and associations for the marketing and promotional activities of the products, for which it paid certain amount. Department has sought to include this amount paid by adidas India to sport personalities and associations in the assessable value of goods imported by adidas India by taking recourse to rule 10(1)(e) of the 2007 Rules.  It was the expenses incurred by adidas India for the marketing and promotion of the products that were sought to be included by the Department in the value of the products imported under rule 10(1)(e) of the 2007 Rules for determination of the transaction value. It was held that the conditions provided for in rule 10(1)(e) were not satisfied and, therefore, no addition could have been made to the price actually paid by adidas India to adidas Germany for determination of the transaction value of the goods that were imported. Principal Commissioner had found that the amount spent by adidas India towards sponsorship/endorsement was not on behalf of adidas Germany and nor the payments were made as a condition of sale of the imported goods. In fact, the amount was spent by adidas India on its own account.


The Commissioner of Customs, Inland Container Depot, Patparganj, New Delhi1, by order dated 19 March 2018, has dropped the proceedings initiated under the demand-cum- show cause notice dated 28 April 2017 that was issued to the respondent adidas India Marketing Pvt. Ltd2 under section 28(4) of the Customs Act 19623. It is this order that has been assailed by the Revenue in this appeal.

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