TMI Blog2016 (9) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... attracted - royalty/ value of designs, drawings includible. Design of the production is only one of the component of the collaboration agreement. There are many more services which are provided in respect of the goods marketed by the appellant by the foreign collaboration. Only a portion of the lump sum amount attributable to the design cost of product manufactured abroad. Matter remanded back to the original adjudicating authority for determination of appropriate quantum of the value to be added - appeal disposed off - decided against appellant. - APPEAL No. C/1003/04 - Final Order No. A/90455/2016-WZB/CB - Dated:- 9-9-2016 - Mr. Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri.T Vishwanathan, Advocate for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight, title or interest in the trademarks and all other marks similar in sight or sound or meaning, including but not limited to non-english equivalents of the trademarks (the similar marks). Our company will sign all documents and do all acts required by licensee in order to protect the Trademarks and respective owner s and licensee s right to use the Trademarks. 7. Any use of the trademarks or similar marks by our company in violation of this arrangement will constitute infringement of the trademarks and will subject our company to all civil remedies available at low and all administrative and criminal penalties. 8. Respective owners of Trademarks and Licensee are the intended beneficiaries of the foregoing undertaking. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. 8.2 The Indian company will not engage any third party manufacturer, or place any order for manufacture of the contract products with any third party manufacturer, unless: a) The Indian company has provided the foreign company with all information as the foreign company may reasonably request concerning the prospective manufacturer; b) The foreign company has provided its prior written consent to the appointment of the manufacturer; and c) The manufacturer has signed the manufacturer s undertaking (Schedule B). 8.7 The Indian company shall at its own expense and when reasonably requested to do so by the foreign company, provide the foreign company with samples and copies of the contract products and all pack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lump sum royalty payable. In the above circumstances, the original adjudicating authority examined the collaboration agreement and held that the lump sum royalty of US $ 6.00 lakhs needs to be added in terms of Rule 9 (i) (b) (iv) of the Customs Valuation Rules, 1988. The appellant challenged the said order before the Commissioner (Appeals) who dismissed the appeal. Aggrieved by the said order, the appellants are before the Tribunal. 2. The learned Counsel for the appellants argued that they are not supplying any design to the manufacturer based in Malaysia and therefore, the value of designs, drawings, etc. cannot be added in terms of Rule 9 (i) (b) (iv). He argued that in terms of the agreement the footwear should be manufactured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no supply of any design, drawings, etc. to the foreign vendor and therefore, in terms of Rule 9 (i) (b) (iv) no value can be added to the value of the goods. For this purpose, he relied on the definition of design and catalogue as it appears in the American Heritage Dictionary, 3rd Edition. The learned Counsel also relied on the extracts from Customs Valuation Commentary on the GATT Customs Valuation Code. The learned Counsel also relied on the decision of the Tribunal in the case of SRF Ltd. 2003 (161) ELT 721 (Tri-Del) and the decision of the Tribunal in the case of Totalfinaelf India Ltd. 2008 (22) E:T 581 (Tri-Mum) to assert that it is improper to add only one of the two royalty. 3. The learned AR relies on the impugned order. He ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... talogue to the foreign vendor. The foreign vendor thereafter copies the shoes and manufactures one pair of the same. The said pair is thereafter examined for specifications by the appellant. After approval of the appellant, the shoe is sent to foreign collaborator who again examine the shoe for the specifications. After the shoe is approved by the foreign collaborator, the appellants permit the vendor to manufacture and supply the same to the appellant. In these circumstances, it is obvious that all the specifications of the shoe are supplied by the appellant to the vendor in the shape of catalogue and real shoe approved by the appellant as well as the foreign collaborator. A design need not be two dimensional it can be three dimensional pi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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