https://www.taxtmi.com/caselaws?id=448071 CESTAT Chennai ruled that royalty payments to foreign entities cannot be included in transaction value for customs duty calculation unless two conditions are met: payment must relate to imported goods and be a condition of sale. The Department argued that since the foreign entities were group companies, royalty paid on annual net sales should be included. However, the Tribunal found no evidence that royalty was a condition of sale, noting the supplier procured goods from third parties and royalty was paid to separate Swiss companies with no role in supply. Following SC precedent in Toyota Kirloskar and CESTAT Mumbai decisions, the Tribunal held that without proof the relationship influenced pricing, royalty on net sales unrelated to imported goods cannot be added to assessable value. Department's appeal dismissed. en-us Mon, 08 Jan 2024 00:00:00 +0530 Thu, 11 Jan 2024 17:04:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=448071 CESTAT Chennai ruled that royalty payments to foreign entities cannot be included in transaction value for customs duty calculation unless two conditions are met: payment must relate to imported goods and be a condition of sale. The Department argued that since the foreign entities were group companies, royalty paid on annual net sales should be included. However, the Tribunal found no evidence that royalty was a condition of sale, noting the supplier procured goods from third parties and royalty was paid to separate Swiss companies with no role in supply. Following SC precedent in Toyota Kirloskar and CESTAT Mumbai decisions, the Tribunal held that without proof the relationship influenced pricing, royalty on net sales unrelated to imported goods cannot be added to assessable value. Department's appeal dismissed. Case-Laws Customs Mon, 08 Jan 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=448071