TMI Blog2017 (4) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged in the manufacture of Recorded Compact Audio/Video/Ram Discs (herein after referred to as RCDs) falling under Chapter Sub-heading 8524.90 of Central Excise Tariff Act, 1985. The appellant was manufacturing RCDs on job-work basis for the various music companies such as, Shemaroo Video Ltd, Venus Records and Tapes, Tips Ltd. etc. These music companies purchased the copyright of the song/movie of different producers, artists of the songs/pictures for which payment of royalty either in lump sum or in part, is made by the music companies to the copyright owners. The principal provides Digital Audio Tape (DAT) or Master Tape to the appellant. These DAT and Master Tapes are used for manufacture of RCDs. The case of the Department is that the royalty paid by the music company to the various copyright owners should be included while arriving at the assessable value of the RCDs in the hands of the appellant. Accordingly, on the differential value the Central Excise duty demand was confirmed. Being aggrieved by the Order-in-Original, the appellant filed an appeal before the Commissioner (Appeals). The learned Commissioner (Appeals) upheld the Order-in-Original and rejected the appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not justified, is not proper as the appellants have paid the duty of ₹ 981120/- only after the same was pointed out by the departmental officers. In this connection the ratio of law laid down by tribunal in case of CCE V. Deepak Spinners reported in 2005 (179) ELT 93 (Tri) wherein it is held that the depositing duty on. Being caught by the department is not voluntary payment and does not call for any leniency, has to be followed. Similar view was taken in the case reported in 2004 (167) ELT 195.Accordingly, I find that the equivalent penalty imposed by the lower authority is justifiable. Therefore, the impugned order passed by the lower authority is sustainable and I do not find any reason to interfere with the same. In view of the above findings of the impugned order, we observe that the issue involved in the present case and the facts related thereto are identical to the case of KRCD (supra). This Tribunal s decision has been set aside by the Hon'ble Supreme Court as reported in 2015 (319) ELT 364 (SC). The Hon'ble Supreme Court passed the following order: - 6. In the present case, Section 4(1)(a) of the Central Excise Act will not apply for the simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is important to note that where the master tape is supplied by the distributor who is the copyright holder to the appellant, whether free of charge or at a reduced cost such master tape must be used in connection with the production and sale of goods by the assessee. What is clear from the present transaction is that the master tape contains within it music/picture in digital form. There is no doubt whatsoever that the music/picture supplied on the master tape ought to be valued and has been valued as additional consideration that flowed from the buyer to the assessee, and its value has been accepted at rupee one per CD. So far as the royalty payable for such music is concerned, even if we agree with the learned Counsel for the Department that such royalty is inextricably connected with the music and therefore, would be used in connection with the production of the duplicate CDs, yet the explanation requires that such use must not merely be in connection with production but must also be in connection with the sale of such duplicate CDs. As has been pointed out earlier in this judgment, the entirety of the duplicate CDs is sold only to the distributor who is the copyright holder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Similarly, in Sidhosons Anr. v. Union of India Others - 1986 (26) E.L.T. 881 (S.C.), the appellants were manufacturing electrical goods which were labeled with the brand name Bajaj and sold by the appellant only to Bajaj Electricals Limited and to none else. The price fetched by the goods manufactured by the appellant was the price of the electrical goods without the brand name. It was held :- ....The enhancement in the value of the goods by reason of the application of the brand name is because of the augmentation attributable to the value of the goodwill of the brand name which does not belong to the manufacturers and which added market value does not accrue to the petitioner company or go into its coffers. It accrues to the buyers to whom the brand name belongs and to whom the fruits of the goodwill belong. Excise duty is payable in the market value fetched by the goods, in the wholesale market at the factory gate manufactured by the manufacturers. It cannot be assessed on the basis of the market value obtained by the buyers who also add to the value of the manufactured goods the value of their own property in the goodwill of the brand name . The petitioners are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cale 72] the Bank had, under an agreement with the foreign company, imported a computer software and manuals, the total value of which was US $ 4,084,475. The Bank filed an application for refund of Customs duty on the ground that the basic cost of software was US $ 401,047. While the rest of the amount of US $ 3,683,428 was payable only as a licence fee for its right to use the software for the Bank countrywide. The claim for the refund of the Customs duty paid on the aforesaid amount of US $ 3,683,428 was not accepted by this Court as in its opinion, on a correct interpretation of Section 14 read with the Rules, duty was payable on the transaction value determined therein, and as per Rule 9 in determining the transaction value there has to be added to the price actually paid or payable for the imported goods, royalties and the licence fee for which the buyer is required to pay, directly or indirectly, as a condition of sale of goods to the extent that such royalties and fees are not included in the price actually paid or payable. This clearly goes to show that when technical material is supplied whether in the form of drawings or manuals the same are goods liable to Customs duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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