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2023 (7) TMI 589 - AT - CustomsValuation of imported goods - inclusion of licence fee in the invoice value - licence fee payable is related to the imported goods or not - condition of sale - HELD THAT:- The relevant part of the License agreement has been already noticed. It shows that the payment of licence fee is for each WTG commissioned. Thus, it cannot be said that the licence fee is a condition of sale of the parts and components imported by appellant. The Explanation of Rule 10 (1) (c) was considered by the Tribunal in the case of Brembo Brake India Pvt. Ltd. Vs Commissioner of Customs (Imports), Mumbai [2014 (11) TMI 22 - CESTAT MUMBAI] has held that the royalty and other charges are not includible and the impugned order is not sustainable and is set aside. It can be seen that Rule 10 (1) (c) uses the words ‘as a condition of sale’. The Explanation only states that if the licence fee paid as a condition of sale, such licence fee is includable in transaction value even if the goods have undergone some process. There is no evidence to establish that the licence fee paid is a condition of sale of the goods. The Hon’ble Apex Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S FERODO INDIA PVT. LTD [2008 (2) TMI 12 - SUPREME COURT] had occasion to analyse the very same issue and has held that the decision in Essar Gujarat Ltd. [1996 (11) TMI 426 - SUPREME COURT] is not applicable - The Tribunal in the case of Remy Electricals India Ltd. [2017 (6) TMI 32 - CESTAT CHENNAI] has followed the decision of Hon’ble Apex Court in Feroda India Pvt. Ltd. [2008 (2) TMI 12 - SUPREME COURT] to hold that the licence fee cannot be included to the transaction value when the same is not a condition of sale. The order passed by the Commissioner (Appeals) does not require any interference. The appeal filed by Department is dismissed.
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