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2019 (1) TMI 1049 - AT - CustomsValuation of imported goods - import of goods from their principals M/s Aquatech International Corporation USA - related party transaction or not - enhancement of invoice value by 10% under Rule 7A of Valuation Rules 1988/ Rule 8 of Valuation Rules, 2007 - Rule 9(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 - addition of royalty charges to value of imported goods in terms of Rule 9(1) (c) of Valuation Rules, 1988 and 10(1) (c) of the Valuation Rules, 2007. Enhancement of invoice value by 10% under Rule 7A of Valuation Rules 1988/ Rule 8 of Valuation Rules, 2007 - Held that:- The Adjudicating authority has recorded findings that: On comparison of the prices of the in terms of rule 3(3)(b)(iii) ibid in column 4 & 6 of the Table I find that the supplier has taken nearly 10% margin of profit on the prices procured by them from other vendors. In a normal trade practice, if the goods are being exported to India by the suppliers, there are some addition like marketing, selling expenses, administrative and other general expenses, tax liability, depreciation of the factory investments, loading, unloading charges, handling charges, internal freight charges, insurance profit etc in determining the prices for the purpose of export. This all addition constitutes from 15% to 25% in addition to the procured prices. However, only 10% has been added by the supplier for exportation of the goods to the Indian importer. Accordingly, the invoice value may be loaded to the tune of 10% in terms of Rule 8 of Customs Valuation Rules, 2007 read with section 14 of the Customs Act, 1962 (as amended time to time).” - Though these findings and addition were challenged by the appellant in their appeal before the Commissioner (Appeal), Commissioner (Appeal) has not recorded any finding in his order in this respect. Hence matter for consideration of additions as ordered by the adjudicating authority under Rule 7A of Valuation Rules 1988/ Rule 8 of Valuation Rules 2007 needs to be remanded back to the Commissioner (Appeal) for consideration of the issue. Addition of royalty charges to value of imported goods in terms of Rule 9(1) (c) of Valuation Rules, 1988 and 10(1) (c) of the Valuation Rules, 2007 - Held that:- The value of the imported goods is included in “project value” and royalty has been paid on the project value determined inclusive of the value of imported goods. Thus in terms of the law laid down by the Apex Court in case of Matsushita Televisions [2007 (4) TMI 5 - SUPREME COURT OF INDIA], the conditions for addition of royalty charges as laid down in Rule 9 (1)(c) of the Valuation Rules, 1988 are satisfied in the present case - there are no merits in the submissions of the appellants in relation to addition of royalty charges in the value of imported goods in terms of Rule 9 (1) (c) of Valuation Rules, 1988/ Rule 10(1)(c) of Valuation Rules 2007 - Thus, the issue of addition of Royalty Charges will be dependent on the terms and condition of Royalty agreement. Appeal allowed in part by way of matter on remand.
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