Customs valuation and royalty payments require clear verification of book entries and transaction linkage before inclusion.

Royalty or technical know-how fees shown in the importer's books required proper verification before they could be relied on in customs valuation. The assessable value could be affected only by payments actually made and linked to the very import transaction under examination; unrelated payments could not be added. As the earlier order did not clearly reconcile the book entries with the valuation dispute, the matter was remanded to the adjudicating authority for fresh verification of the accounts and a clear finding on the existence and relevance of any such payment.

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Issues: Whether the royalty or technical know-how fee reflected in the importer's books of account was relevant to valuation of the imported goods and required proper verification before deciding the customs valuation dispute.

Analysis: The valuation exercise turned on whether the amounts shown as royalty or technical know-how licence fee were in fact paid and, more importantly, whether such payments related to the very transaction under examination. The record indicated that the lower authorities had proceeded on an incomplete verification, as the books of account showed such payments while the order under challenge did not contain a clear discussion reconciling that position. For valuation purposes, only payments connected with the present import transaction could be taken into account, and unrelated payments could not affect the assessable value.

Conclusion: The matter required reconsideration by the adjudicating authority with verification of the books of account and a clear finding on the existence and relevance of any royalty payment to the present transaction. The appeal was accordingly disposed of by remand.

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