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2014 (12) TMI 649 - AT - CustomsValuation of goods - Inclusion of royalty amount - Technical knowhow service - import of parts and components for various compressed air and gas equipments construction and mining equipments generators industrial tools and assembly systems etc. - Rule 10(1)(c) of Custom Valuation Rules 2007 - Held that - Royalty is required to be paid only on the sale of the manufactured goods and royalty is not relevant to the import of the components. For arriving the value for calculation of royalty amongst other elements cost of standard bought out components and the landed cost of imported components are deducted. The above clause also makes it clear that this method of deduction is adopted even if the procurement of components are made from any source other than the related foreign suppliers. Therefore from the clause referred above it is amply clear that the royalty is not paid as a condition of the sale of the goods being valued . Thus the royalty has nothing to do with the value of the imported raw-materials procured from the related foreign supplier or value of the imported components procured irrespective of origin. In these set of facts Rule 10(1)(c) of Customs Valuation Rules 2007 is not applicable. If the royalty is computed excluding the cost of imported material and is based on the indigenous value addition which clearly shows that the payments made by the appellant for the collaboration and consultancy services has nothing to do with the imports undertaken by the appellants and therefore the same could not be included in the assessable value of the goods imported under Rule 9 (1) (c) & 10 (1) (e) of the Customs Valuation Rules. - Decided in favour of assessee.
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