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M/s. RANE BRAKE INDIA LTD. Versus COMMISSIONER OF CUSTOMS (PORT-IMPORT) , CHENNAI-III

2016 (6) TMI 811 - CESTAT CHENNAI

Valuation - inclusion of royalty, lump sum payment (license fee) and technical assistance fee paid to the supplier (related party) - Rule 10(1)(c)of the Customs Valuation (Determination of Value of Imported Goods) Rule, 2007 - Held that:- In absence of proper clause of the agreement being depicted in the order and without demonstrating the manner how such clauses warrant valuation to be made in terms of that Rule arbitrary valuation has been made. In stead of objective evaluation of the agreemen .....

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Veerabhadra Reddy, JC (AR) ORDER PER D.N. PANDA: Appellant being aggrieved by the order of adjudication dated directing royalty, lump sum payment (license fee) and technical assistance fee paid to the supplier (related party) shall be includible in the import value of the goods, approached the learned Commissioner (Appeals) for redressal. But the appeal was rejected. The goods imported were:- (i) Bronze Powder; (ii) Potassium Nitrate; (iii) Rock Wool; (iv) Stainless Steel Fibre; (v) Phenolic Re .....

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sion that the adjudication conclusion is proper. 2.1 Appellant submitted that the Rule 10(1)(c)of the Customs Valuation (Determination of Value of Imported Goods) Rule, 2007 shall have no application because none of the three payments relate to the import of the goods. Neither of the authorities below have examined the three agreement that was supplied to them in reply to question No.21 of the questionnaire. (Ref: copy of questionnaire existing in page 193 of the appeal folder). Had they examine .....

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consideration under Rule 10 (1) (c)/10 (1) (e) ibid. This shows that the imported goods have nexus with the lump sum/royalty paid for the technical-knowhow and the technical fee and the existence of condition of sale. The appellant has split the value of these goods and have categorized them as value of physical goods and as technical-knowhow/technical fee. 2.2 It is further explained by the learned counsel that Rule 10 (1) (c) has a limited scope and confined to the imported goods without bein .....

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without depicting proper clause of the agreement that has guided them to reach to the conclusion that all the three payments should be includible in the import value. 3. Revenue on the other hand says that all the agreements were examined threadbare and both the authorities have recorded their observation properly. It is also the Revenues submission that the condition of sale is inferred from the documents and that relates to the output manufactured. In view of the proper finding by both the au .....

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epicted only a summary of the agreement in few lines without properly bringing out relevant clauses that is contributory to the valuation sought to be made in terms of Rule 10 (1) (c) of the Valuation Rules. In absence of proper clause of the agreement being depicted in the order and without demonstrating the manner how such clauses warrant valuation to be made in terms of that Rule arbitrary valuation has been made. In stead of objective evaluation of the agreements and thread bare examination .....

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do the exercise of valuation granting fair opportunity to the appellant and determine the value of the imported goods objectively in accordance with law:- (i) The authority shall bring the controversy in clear terms upon examination of the respective documents borne by the record; (ii) Respective clause of the agreement for consideration of application of Rule 10 (1) (c) of the Valuation Rules should be clearly depicted and that should be brought to the notice of the appellant for appropriate de .....

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