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2015 (2) TMI 646 - AT - CustomsValuation of goods - Inclusion of lumpsum trademark fee and lumpsum royalty for technical knowhow - Held that:- From the trade mark usage agreement, it is clear that the fee is paid for the use of trade mark on the goods/semi-finished goods manufactured in India. The payment of consideration is split into two modes; one by way of lumpsum payment of US $ 0.5 mn and another by way of running royalty as a percentage of sale value of the manufactured goods. Similarly, in the case of technical know-how agreement, the consideration is paid for supply of technical know-how and for training the personnel of the appellant in the manufacturing activity to be undertaken in India. The consideration is paid in two modes; one by way of lumpsum payment of US $ 1.5 mn and the balance by way of running royalty as a percentage of the sale value of the products manufactured. In these agreements, there is no stipulation or condition as to where from or from whom the appellant has to procure the raw materials for the manufacture of the goods. The agreements do not envisage or stipulate any condition with regard to the procurement of raw-materials for the manufacture to be undertaken in India. The appellant has entered into separate contracts for the procurement of raw-materials. Even in the contract entered into with the related foreign suppliers, it is clearly stipulated that the appellant has the freedom to procure the raw-materials from any persons, so long as the quality/standard is maintained. Thus, the agreement for the purchase of raw materials also does not impose any condition with regard to the source of procurement of raw materials. In these circumstances, it cannot be said that the relationship has influenced the supply price of the raw materials. - Following decision of Escorts Ltd. case [1995 (10) TMI 140 - CEGAT, NEW DELHI] and Mahindra & Mahindra Ltd. [1995 (3) TMI 88 - SUPREME COURT OF INDIA] - impugned orders are not sustainable in law. Accordingly, we set aside the same - Decided in favour of assessee.
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