TMI Blog2014 (2) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore the payment of royalty and licence fee was a condition pre-requisite for the supply of the imported goods - appellant has not made out any prima facie case in their favour for complete waiver of pre-deposit of the dues adjudged - Conditional stay granted. - C/486-487/2010-Mum - Stay Order Nos. S/591-592/2011-WZB/C-I(CSTB) and Misc. Order Nos. M/606-607/2011-WZB/C-I(CSTB) - Dated:- 14-12-2011 - Shri Ashok Jindal, Member (J) and P.R. Chandrasekharan, Member (T) Shri S.S. Sekhan with D.H. Nadkarni, Advocates, for the Appellant. Shri Navneet, Addl. Commissioner (A.R.), for the Respondent. ORDER Appeals, stay applications and condonation of delay application are filed against Order-in-Original CAO No. 30/2010/CAC/CC/MS dated 18-3-2010 passed by the Commissioner of Customs (Adjn.), New Customs House, Mumbai. 2. In the COD application, the appellants has prayed for condonation of delay of one day in filing the appeals and the delay is due to some defect in the appeals as pointed out at the time of submission of the documents in the registry which required to be rectified by the appellant. The reason given for the delay is satisfactory and, accordingly, we cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said Customs Act. The notice further proposed imposition of penalty on Shri Jiten Hemdev, Managing Director of the SEPL under Section 112(a) and (b) of the Customs Act, 1962. The case was adjudicated by the Commissioner of Customs vide an impugned order and the Commissioner of Customs redetermined the value of the goods imported at Rs. 2,09,92,982/- and held the same liable for confiscation under Section 111(m) of the Customs Act, 1962. He further held that the imported digi beta tape containing Bluebird having assessable value amounting to Rs. 1,39,229/- liable to confiscation under Section 111(j) and (l) of the Customs Act, 1962 and in lieu of confiscation, imposed redemption fine of Rs. 15,000/-. The learned Commissioner also demanded differential duty amounting to Rs. 79,19,049/- under the proviso to Section 28(1) of the Customs Act, 1962 along with applicable interest under Section 28AB of the Customs Act, 1962. He also imposed an equivalent penalty on the appellant under Section 114A of the Customs Act, 1962 and a penalty of Rs. 2,00,000/- on Shri Jiten Hemdev, Managing Director of SEPL under Section 112(a) and (b) of the Customs Act, 1962. Hence the appellants are be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nadu Housing Board v. Collector of Central Excise, Madras - 1994 (74) E.L.T. 9 (S.C.) wherein it was held that when the law requires an intention to evade payment of duty, then it is not mere failure to pay duty. It must be something more. That is, the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. In such a situation, extended period of time can be invoked. He also relied on the judgment of the Apex Court in the case of Collector of Central Excise v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) wherein the Apex Court held that extended period of five years is applicable only when something positive other than mere inaction or failure on the part of manufacturer is proved. In the instant case, they have not suppressed any facts with an intention to evade payment of duty and they were under the bona fide belief that royalties and licence fees paid need not be included in the assessable value inasmuch as such royalties were for reproduction of imported goods. 5. The learned A.R. appearing for the Revenue on the other hand contended that in the case under consideration, the licencing rights conferred by the supplier includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic video). Video rights (Home rental, Home sell-through, Commercial and Video-on-demand), Television rights (Terrestrial, cable and satellite) and Ancillary rights (for Airlines, ships and hotels). In the case of cinematic rights, the rights pertain to exhibition of films; in case of Television rights the same pertains to broadcasting, that is, transmission of encrypted material contained in the tapes through TV channel, cable TVs etc. Similarly in the case of ancillary rights also it is for exploitation of films by way of exhibition/display in airlines, ships and hotels. As regards video rights, the same are for sale/lease by way of Home Video Rental, Home Video sell-through and commercial videos in various formats such as video cassettes, video discs including VCD and DVD. Thus only in the case of video rights, reproduction of the recording of media is involved. Here also the material reproduced has to contain sub-titles in the Indian languages and it is not an exact reproduction of the imported goods either in content or in media format. In other words, rights conferred is far wider in scope and design and the same are not confined to the right to reproduction alone. The rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was rejected. The Ferodo India Pvt. Ltd. (supra) case relied upon by the petitioner deals with a completely different set of facts. In that case the importer buyer was a manufacturer of brake liners and brake pads and had entered into an agreement with a foreign licensor who agreed to permit manufacture of brake liners and brake pads by the licensee. Under the agreement, the licensor agreed to disclose the relevant secret processes, formula and information to the licensee. The licensee was required to import/buy raw material and capital goods from the licensor. The licensee was obliged to pay a licence fee along with royalty based on the net sales value of licensed products sold, consumed or otherwise disposed of. In that context the Hon ble Apex Court held that under Rule 9(1)(c) the cost of technical know-how and payment of royalty is includible in the price of the imported goods if the said payment constitutes a condition pre-requisite for supply of imported goods by the foreign supplier. On the other hand if such payment has no nexus with working of imported goods, then such payment was not includible in the price of imported goods. In the instant case as per the contract en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e courier who declared the value and the appellant did not declare nor were they asked to declare the price of the goods and hence there is no suppression, the same is without any basis whatsoever. In this case, the importer is the appellant. The courier agency will not know what are the terms and condition of sale and payment of amounts/fees made by the appellant apart from those declared in the invoice. If the appellant had made any payment over and above that shown in the invoice it was their responsibility to declare the same before the customs authorities. Therefore, the extended period of time has been rightly invoked inasmuch as suppression has been clearly established. Further the statement of Shri Jiten Hemdev, M.D of the appellant-company clearly shows that the transaction value declared by SEPL at the time of customs clearance was incorrect as per Customs (Valuation) Rules, 1988, and they had only declared the material value of the goods under importation. In view of the above position, the reliance placed by the appellant on the judgment of Tamil Nadu Housing Board case and Chemphar Drugs Liniments (supra) is of no help. 8. Thus, we are of the view that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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