TMI Blog2017 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of his direction. It would appear that Revenue is not consistent in articulating its stand on the inclusion of royalty in the assessable value. The appellant is not wrong in contending that there is no proper finding on relationship with the foreign supplier and the consequent rejection of declared value on that ground will not meet the test of law - In the circumstances, the only option before us is to have the matter re-determined - appeal allowed by way of remand. - C/980/2006 - A/87965/17/CB - Dated:- 24-1-2017 - Shri M V Ravindran, Member (Judicial) And Shri C J Mathew, Member (Technical) Shri T Vishwanathan, Advocate for the appellant Shri M K Sarangi, Jt. Commissioner (AR) for the respondent ORDER P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht Material such as film, picture etc. Hence I reject the transaction value declared in the invoice. I also find that each every imported Copy Right Material is different. Therefore there are no identical similar goods hence the value is not applicable under rule 5 6 of Customs Valuation Rules, 1988. As there are no sales of these Copy Right Materials in India, therefore Rule 7 of CVR, 1988 cannot be made applicable. Therefore the option of cost constructions mentioned under rule 7 (A) is applicable. Production costs, usual expenses, margins of the Supplier determine the value the film under rule 7 (A) of CVR, 1988. On perusal of the agreements, it is found that there are provisions of such payments by the importer. As per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty the films could not be sold or distributed in India. It is also held that the appellant is an agent of the supplier and the supplier, being in a position, directly or indirectly, to exercise restraint over the appellant, legally or operationally, has to be considered as a related person. The condition that the DVD devices are to be procured only through designated supplier makes the relationship, as well as the precondition in sale, evident. 4. Learned Counsel for appellant contends that the relationship is one of a distribution licensee and that Explanation II in rule 2 (2) has laid down certain criteria for deeming a sole distributor to be related to the overseas supplier. Reliance has been placed on the decision of the Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported goods. 5. Learned Authorised Representative points out that the original authority had rendered a finding that the price had to be re-determined under rule 7A of Customs Valuation Rules, 1988 as the expense incurred by the producer in making the copyrighted material had not been declared. The inclusion of specifications of the source of procurement of the DVDs and the manner of determining the price in the Video Distribution License Agreement indicates, according to Revenue, that the relationship was not one of ordinary sale and purchase. Attention was also drawn by him to the title and materials vesting in and remaining with the licensor and the provision for termination in case of default in payment of the royalty. On behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the original authority to finalise all assessments on the basis of his direction. It would appear that Revenue is not consistent in articulating its stand on the inclusion of royalty in the assessable value. 7. In the matter of Saregama India Ltd referred to by Learned Counsel, the imported goods were master tapes and not the pre-recorded materials that were the subject of dispute in re Living Media India Ltd. In re Living Media India Ltd , Hon ble Supreme Court considered various decisions pertaining to rule 9 (1)(c) of Customs Valuation Rules, 1988 to arrive at the conclusion that royalty on pre-recorded material that is imported will be added to the value of the material for levy of duties of Customs. We are in agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Such determination has not been considered in the orders of the two lower authorities. In these circumstances, the appellant is not wrong in contending that there is no proper finding on relationship with the foreign supplier and the consequent rejection of declared value on that ground will not meet the test of law. 10. In the circumstances, the only option before us is to have the matter re-determined in accordance with the decisions that we have referred to supra. 11. To enable such reconsideration, we set aside the impugned order and remand the matter back to the original authority to examine the facts and circumstances pertaining to the import in its entirety and to apply the provisions of the relevant Customs Valuation R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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