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2015 (2) TMI 179 - AT - CustomsValuation of goods - Enhancement in value of goods - inclusion of value of a taxable service rendered in India - The television programmes have been aired from Singapore - Held that:- Distribution fees was for acquiring non-exclusive rights for satellite delivered, advertiser supported, television service. Thus the payment was made for the rights to distribute a service and has nothing to do with the goods imported by the appellant from the foreign entity. The letter dated 28-12-2007 addressed to the Standard Chartered Bank also make it clear that the amount of ₹ 19,76,02,857/- remitted was towards the distribution fees required to be remitted in terms of the Distribution Agreement. The Chartered Accountant's certificate dated 28-12-2007 for remittance under section 195 pf the Income Tax Act also confirms this factual position. Thus, there is no evidence, whatsoever, adduced by the Revenue to show that the said remittance was towards the royalty/licence fee paid for the contents of the digi-beta tape imported by the appellant so as to form a part of the taxable value of the goods imported. From the Service Tax Returns filed by the appellant with the Service Tax Authorities, it is seen that the appellant is registered under the taxable category of "Broadcasting Services" and the distribution fees collected has been declared to the department for the purposes of payment of service tax thereon. This also makes the position clear that the distribution fees pertained to services rendered in India, part of which was remitted to the foreign television channel. Therefore, the question of including consideration for the service rendered in the value of the goods imported does not arise at all. Thus it appears that the adjudicating authority mis-directed himself in including the value of a taxable service rendered in India in the value of the goods imported. The television programmes have been aired from Singapore and the tapes were not required for broadcasting the programmes. The requirement of the tapes was for the limited purpose of obtaining certification from CBFC and technical quality checks and has nothing to do with the distribution activity. Therefore, from whatever angle one may look at the transaction, there is nothing on record to show that the remittance made to the foreign entity had anything to do with the goods supplied. Therefore, the impugned order enhancing the value of the goods to the extent of remittance of distribution fees and demanding customs duty thereon under CVR is clearly unsustainable in law. Accordingly we set aside the impugned order - Decided in favour of assessee.
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