Customs valuation excludes royalty on finished goods sales where no nexus with imported raw materials is shown.

Technical know-how or licence fee is includible in the customs value of imported goods only where it has a direct nexus with the imports and is payable as a condition of sale. On the facts, the imported goods were raw materials, the royalty was linked to the sale price of the finished product, and no material showed that the fee formed part of the price of the imports or was required for their purchase. The fee was therefore not includible in the assessable value of the imported raw materials, and the Revenue's appeal failed.

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Issues: Whether technical know-how/licence fee paid under the collaboration agreement was includible in the assessable value of the imported raw materials.

Analysis: The imported goods were raw materials, and the record did not show that the licence fee had any nexus with the imported consignments. The appellate authority found that the royalty was calculated on the basis of sale price of the finished product and was unrelated to the price of the imported raw materials. No contrary material was produced to establish that the payment formed part of the price of the imports or that it was payable as a condition of sale of those goods.

Conclusion: The technical know-how/licence fee was not includible in the value of the imported raw materials, and the Revenue's appeal failed.

Ratio Decidendi: Royalty or technical know-how fee is includible in the customs value only where it has a direct nexus with the imported goods and is payable as a condition of sale of those goods.

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