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2016 (11) TMI 906 - AT - CustomsValuation - enhancement of value - royalty - goods imported from sister/related company for supply - Held that: - I find that there is no express/implied condition in the Agreement inferring that the appellant is under any contractual obligation to import the raw material for manufacturing the final products from the Licensor/Bekaert, Belgium the related supplier only. The Appellant is free to import the raw material from the licensor or any anybody else. The Licensee is liable to pay royalty to the Licensor (Bekaert, Belgium) even when the licensee (the Appellant) imports the raw material from anybody else and do not at all import the same from the related foreign supplier. In such a situation, the condition that the payment of royalty is relatable to the imported goods and is a condition for sale of goods cannot be sustained in law. Thus, there is no nexus between the royalty payment and the import of components. The finished goods are manufactured by Technical knowhow from sister/related company; nothing was brought to notice that the agreement for technical know how between the importer respondent and their related person supplying the goods or finding that raw material needs to be purchased from the related person only. In the absence of any such restrictive Clause, the first appellate authority was correct in coming to a conclusion that the loading of value by an amount paid as royalty seems to be incorrect, is the correct decision and does not require any interference. Appeal rejected.
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