TMI Blog2008 (4) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... nsultant, for the Appellant. Shri N.J. Kumaresh, SDR, for the Respondent. [Order per P.G. Chacko, Member (J)]. - After examining the records and hearing both sides, we are of the view that the appeal itself requites to be finally disposed of at this stage. Accordingly, after dispensing with pre-deposit and allowing the application for out-of-turn disposal of the appeal, we take up the appeal. 2. Under a Franchise Agreement dated 5-4-1998, the appellants had obtained technical know-how from M/s. Marrybrown Fried Chicken SDN, BHD, Malaysia for their Fast Food Restaurants in India. The agreement made them liable to pay licence fee/technical know-how fee of US$ 25,000 to the Malaysian company. It also obligated them to pay a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. 3. After examining the relevant terms and conditions of the Franchise Agreement as discussed in the impugned order, we find that the franchise fee, licence fee and the royalty paid by the appellants to the foreign supplier had a relation to the importation of the subject goods and that supply of technical know-how and assignment of the right to use patent, brandname etc. of the supplier were a condition of sale of the said goods and, therefore, all the fees paid by the assessee to the foreign supplier are addable to the invoice value of the goods under Rule 9(1)(c) for the purpose of payment of duty. Under the Franchise Agreement, the franchisee (assessee) obtained from the franchisor (Malaysian supplier) the right to carry out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported goods, which were to be used compulsorily by the franchisee as food ingredients in the licensed products in India. Both the fees were to be paid to the foreign supplier as a condition of sale of the subject goods. All considerations applicable to the franchise fee and licence fee are equally applicable to royalty. Therefore, in terms of Rule 9(1)(c) of the Customs Valuation Rules, all the fees paid by the assessee to the foreign supplier in relation to the imported goods as a condition of sale of such goods are to be added to the price of the goods for the purpose of payment of Customs duty. 4. We have had occasion to examine the scope of applicability of the rule to varied factual situations iii the case of HSI Automotive Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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