Home Case Index All Cases Customs Customs + AT Customs - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 225 - CESTAT BANGALOREValuation of imported goods - related party transactions - addition of 5% royalty on carbon brushes under Rule 10(1)(c) of the Customs Valuation Rules, 2007 - whether royalty paid by the appellant needs to be added to the transaction value of the imported goods? - HELD THAT:- Once the fact that the pricing pattern has been examined from various angles as discussed supra and the fact that it was factually found that the prices declared by the importer was as per the price list of the supplier, the question of adding royalty of 5% does not arise. The Commissioner (A) in the impugned order has held that the appellants have not shown any imports from unrelated suppliers and therefore, it can be inferred that the import is made only from the related suppliers without substantiating the fact that when the transaction value was accepted as to how the royalty paid on the technical know-how influenced the price of the imported goods. The appellant’s submission that once the transaction value of the goods imported from the associated companies are at “arm’s length price” under Rule 3(3)(a) of the Customs Valuation Rules, 2007 is accepted, the Department cannot load 5% royalty to the transaction value under Rule 10(1)(c) of the Customs Valuation Rules, 2007 is absolutely valid and sustainable in law as has been held by the Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S FERODO INDIA PVT. LTD [2008 (2) TMI 12 - SUPREME COURT] wherein it had held that in a given case, if the Consideration Clause indicates that the importer/buyer had adjusted the price of the imported goods in guise of enhanced royalty or if the Department finds that the buyer had misled the Department by such pricing adjustments then the adjudicating authority would be justified in adding the royalty/licence fees payment to the price of the imported goods. In the present appeal, the facts have clearly proved that the pricing was at arm’s length and the relationship had not influenced the price, which has been accepted by the department hence there is no question of adding the royalty to the transaction value as held by the apex court in the judgement referred above. The impugned order is set aside - appeal is allowed.
|