TaxTMI 
TaxTMI 
2018 (2) TMI 1075
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....d company, the valuation was looked into by the Special Valuation Branch of Customs House. 2. The present dispute is with reference to addition of royalty charges paid by the appellant to the Japan Company, in the assessable value of parts and components of zippers imported by them. The Original Authority vide his order dated 30.10.2009 held that the said royalty was neither a pre-condition of sale nor related to the imported goods and as such, there is no need to add any amount attributable to royalty in the valuation of the imported goods. Revenue preferred an appeal against the original order, which resulted in the impugned order. 3. Ld. Counsel contesting the findings of the impugned order submitted that first of all, the said ord....
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....itory. For the consideration of license granted, the Importer shall pay to YKK Japan royalty @ 4% of the Net Selling Price of SF products, @ 2% of the Net Selling Price of T&P products and @ of the Net Selling Price of S&B products. Net Selling Price has been defined as the selling price on the sale of all products manufactured and then sold by the Importer during the royalty computation period (1^st January to 31^st December, less the following items to the extent they are excluded from sales in accordance with generally accepted accounting principle:- (a) Commodity, transaction, sales, turn over, value added or any other transfer taxes of similar character (other than taxes on income) on sales invoices (b) The cost of pa....
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....ce" has been defined to mean the sale price billed by the appellants for its products to its customers in normal arm's length transaction exclusive of taxes, freight and insurance, but including the cost of the bought-out components and the cost of the imported components. Under Clause 1.04 the term "Technical Know-how" was defined to mean technical information required for the manufacture of colour T.V. as specified in Clause 3.01. The technical know-how which was agreed to be furnished to the appellants was to consist of quality control standard and specification of the components to be used in the manufacture of T.V. sets. Further, under Clause 2.01 it was agreed that MEI shall render to the appellants the technical assistance regarding ....
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....h the imported components. Under Rule 9(1)(c) of the Valuation Rules, 1988, only such royalty which is relatable to the imported goods and which is a condition of sale of such goods alone could be added to the declared price. However, in the present case, payment of continuing royalty was payable at the rate of 3% of the net ex-factory sale price of the colour T.V. exclusive of taxes, freight and insurance but including the cost of imported components. In other words, the royalty payment was to be computed not only on the domestic element of the net sale price of the colour T.V. but also on the cost of imported components. A bare reading of the agreement shows that payment under the said agreement related not only to the production of the g....