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2024 (3) TMI 870 - CESTAT BANGLOREValuation of imported goods - inclusion of royalty and the cost of advertisement incurred by the Appellant in India in assessable value - related party - Rule 10(1)(c) and Rule 10 (1)(e) of the Customs Valuation Rules 2007 - demand of differential duty alongwith interest, redemption fine and penalty - extended period of limitation - HELD THAT:- Rule 10(1)(e) 0f the Customs Valuation Rules 2007 provides for addition of all other payments actually made or to be made as a condition of sale of the imported goods, by the buyer to the seller or by the buyer to a third party to satisfy and obligation of the seller, to the extent that such payments are not included in the price actually paid (transaction value). It is found that there is total absence of the prescribed condition present as the appellant is not obliged to incur any particular amount or percentage of invoice value towards sales promotion/ advertisement. Further, we find that the activity of advertisement and sales promotion is a post-import activity incurred by the appellant on its own account and not for discharge for any obligation of the seller under the terms of sale - As per the stipulation in the agreement, the appellant is obliged to be responsible for sales and distribution in its territory of distribution and further to make such expenditure in consultation with the seller, does not attract the provisions of Rule 10(1)(e) of CV Rules. The appellant and M/s. Speedo or M/s. Jockey International are no way related parties as their relationship is principal to principal basis and the fact they are sole distributor in no way makes them related parties as per the Customs Act or the Valuation Rules. Moreover, they have imported from unrelated suppliers who have nothing to do with Jockey International and the distributed products have nothing to do with the licensed products as far as royalty is concerned. The issue being one of interpretation of what should be the value there is nothing brought on record to prove any wilful suppression of facts and therefore invocation of extended period is not justified. The impugned order set aside - appeal allowed.
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