Customs valuation and royalty linkage: royalty tied to indigenous value addition was excluded from imported components' assessable value.

Royalty payable at 5% on indigenous value addition could not be added to the customs value of imported components because the royalty was linked to the manufactured product's local value addition, not to the imported items themselves. The authority distinguished the cited precedent as one dealing with royalty included in the assessable value of concentrates sold, which was not the position here. On that basis, the royalty was excluded from the value of the imported components and the Revenue's appeal failed.

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Issues: Whether royalty of 5% payable on indigenous value addition could be added to the value of imported components for customs valuation.

Analysis: Royalty was held to relate to the indigenous value addition of the manufactured product and not to the imported components. The authority distinguished the cited precedent on the ground that it concerned royalty in the assessable value of concentrates sold, not royalty added to the value of imported items.

Conclusion: Royalty could not be included in the value of the imported components, and the Revenue's appeal failed.

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