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2016 (3) TMI 338 - AT - CustomsEligibility for exemption under Notification 21/2002 - Import of Pop corn maize cleared under Tariff Rate Quota scheme at concessional rate of Custom duty in terms of Notification No. 21/2002, dated 1-3-2002. Exemption denied on violation of Actual User Condition - Held that:- by relying on the case of Sriven Marketing v. Union of India [2012 (1) TMI 204 - ANDHRA PRADESH HIGH COURT], the processes undertaken by the appellant as refrigeration, gradation, packing, fumigation, etc. in case of vending popcorn amounts to manufacture. Therefore, the Actual User condition is satisfied and the appellant are eligible for the benefit of concessional rate of duty under Notification No. 21/2002 and the demand of duty on this amount is not sustainable. Inclusion of Royalty paid - In terms of Rule 10(i)(c) of the Customs Valuation Rules - Whether the royalty paid by the appellant to their licensor is liable to be included in the assessable value for determining the Customs duty - Held that: the royalty payments are made as percentage of the net proceeds of sale of products sold in India and abroad. It is quite obvious that maize product being an agricultural product, the price of the imported goods i.e. maize corn is included in the net proceeds of sale of finished goods which are essentially corn only and the royalty is paid on corn. Therefore, royalty paid by the appellant is includible in the value of the imported goods for purpose of assessment of Customs duty. Confiscation and Penalty - Vending Corn - The department contended that appellant had not used imported goods for manufacturing vending corn but sold the same in the market in the same condition as it was imported and therefore the vending corn is liable to confiscation and confiscated the same under Section 111(d), 111(m) and 111(o) of the Customs Act - Held that: Section 111(m) speaks of confiscation in respect of goods which do not correspond in respect of any particulars with the entry made under Customs Act. Here the entry referred to is the Bill of entry and the declaration thereto. As the declaration did not declare the existence of the Agreement, the goods are liable to be confiscated under Section 111(m) of the Customs Act and penalty under Section 114A and 114AA are to be imposed . Also the import of the goods is not prohibited nor is there violation of post importation condition, therefore, goods can not be confiscated under Section 111(d) and 111(o). - Decided partly in favour of appellant
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