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2016 (12) TMI 827 - AT - CustomsValuation - technical assistant and royalty agreement - royalty - whether value of royalty to be included in assessable value? - Held that: - though the appellants have been held to be related to the collaborator, but declared value has not been examined under Rule 4(3) of the Customs Valuation Rules, 1988 for acceptance or otherwise in reference to test value. The Commissioner (Appeals) has observed that since there is no third party sale of these items, the Dy. Commissioner should have examined the provisions of relevant agreement. The Commissioner (Appeals) has thereafter allowed the appeal of the Revenue. This essentially means that the Commissioner (Appeals) has remanded the matter back to the original adjudicating authority. Import of Neopolitan chocolates, cocoa butter and cocoa butter flavor - related party transaction - foreign collaborator agreement - valuation to be done under Rule 4(3) of the Customs Valuation Rules or under Rule 9(1)(c) of the Customs Valuation Rules? - Held that: - So far as Neopolitan chocolates is concerned, it is a finished goods and it is totally unrelated to the collaboration agreement and, therefore, it cannot be a subject matter to the current dispute on account of the agreement entered into by the appellant. The Order-in-Original clearly held that the appellant and the foreign collaborator are related. However, these imports are not from the foreign collaborator and thus unless it is held that the supplier of these goods is related to the appellant, no charge under Rule 4(3) of the Customs Valuation Rules can be made. This argument regarding purchases not being made from foreign collaborator equally applies to the import of cocoa powder and cocoa butter flavors. Furthermore, Revenue has not shown that there is any restrictive clause or condition for import of cocoa butter and cocoa butter flavor from the foreign collaborator in the agreement. In these circumstances, Rule 9(1)(c) of the Customs Valuation Rules cannot be invoked - appeal allowed - decided in favor of appellant.
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