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2016 (9) TMI 830 - AT - CustomsValuation - inclusion of royalty in the value of imports - collaboration agreement - related party - M/s.Herbalife USA holds 75% of the equity in Herbalife International India Pvt. Ltd - import of material from Herbalife USA - valuation by SVB - Rule 2(2) of the Customs Valuation Rules, 1988 - royalty paid by the importer under the agreement relates to the manufacturing process of product to be manufactured in India or to the manufacture of imported goods - Rule 9(1)(C) of the Customs Valuation Rules, 1988 - rules of interpretation - Rule 12 of the Customs Valuation Rules, 1988 - Held that: - the decision of the Hon'ble Apex Court in the case of Matsushita Television & Audio (I) Ltd [2007 (4) TMI 5 - SUPREME COURT OF INDIA] is relied upon. Only such royalty which is relatable to the imported goods and which is a condition of sale of such goods alone could be added to the declared price - the license and technical assistance agreement entered between the appellant and the Herbalife, USA provide for transmission of technical information and grant of license and involves consideration in the shape of royalty. Running royalties are condition of sale for the transaction value and thus needs to be added in the value for the purpose of payment of Customs duty. Appeal allowed - decided partly in favor of appellant.
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