TaxTMI 
TaxTMI 
2015 (2) TMI 955
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....ist De Kwakel, B.V. Holland, for reproduction of plants varieties in India is liable to be included in the cost of clumps imported by the appellant from the foreign related supplier. Aggrieved of the same, the appellant is before us. 2. The learned Counsel for the appellant submits that they have entered into an agreement for production, propagation and sales license agreement with the foreign supplier. In terms of the aforesaid agreement, the appellant herein has been granted the right of production, multiplication and/or propagation and sales of in-vitro culture cuttings and other plant material of the varieties specified in the agreement in area of India and Sri Lanka. For these rights granted, the appellant is required to pay a royalty....
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....including the cost of royalty paid and treating the same as a condition for the sale of goods merely because the foreign supplier is related does not stand to any reason. The learned Counsel also refers to the meaning of the expression "right to reproduce the imported goods" as clarified by the World Customs Organization. As per this clarification, the right to reproduce the imported goods would also refer to originals and copies of scientific works (such as the importation of a new strain of bacterium which will be reproduced into a form necessary for the production of a vaccine), originals of literary works (such as importation of a manuscript for the purpose of reproduction into a book), models (importation of a scaled down model of a ne....
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....so a similar issue was considered and wherein also royalty was paid in respect of corn and sunflower seeds which were used for production in India. In the said decision, it was held that royalty paid for the reproduction in India cannot be added to the value of the seeds at the time of importation. He submits that this decision has been accepted by the department and has not been taken in appeal before any higher forum. In view of the above, he pleads for setting aside the impugned order and allowing the appeal. 3. The learned Additional Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities. He submits that the clumps imported by the appellant get exhausted in the process of reproduction and therefore....