TaxTMI 
TaxTMI 
2018 (4) TMI 1347
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....ned that licence fee of US $ 24500 ($ 500 per episode and US $ 17000 (US $ 500 per episode) and US $ 1500 (US $ 500 per episode) was to be paid to the supplier of these tapes. In the matter of the imports effected on 17th December 2017 the proper officer sought to enhance the value by US $ 5000 for the entire show of seven episodes even though only three had been imported. The decision of the adjudicating authority to enhance the declared value of Rs. 975 to Rs. 9,87,063, of Rs. 2925 to Rs. 6,87,150 and Rs. 169 to Rs. 5 9,625, confiscation thereof with op t ion to redeem on payment of fine of Rs. 3,00,000, Rs. 2,00,000 and Rs. 20,000 which was upheld in the impugned orders while modifying the penalties, is in dispute. 2. According to Learned Counsel for appellant the provisions of rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules 2007 permitted addition of royalties and licence fees only if these were a condition of sale of the imported goods which in their case was not. Attention was drawn to rule 10(1) of Interpretative Rules ' 1. The royalties and licence fees referred to in rule 10(1)(c) may include among other things, payments in respect to paten....
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....ereby attaining finality as transaction value for the contents and the material as imported. They also claimed the bar to invoke of extended period as the matter was beyond the realm of certainty as held by the Hon'ble High Court of Bombay in Commissioner of Customs (CSI Airport) v. Star Entertainment Pvt Ltd [2015 (329) ELT 50 (Bom.)]. 7. Learned Authorised Representative argued at length relying upon the decision of the Tribunal in Indo Overseas Films v. Commissioner of Customs, Chennai [2002 (139) ELT 729 (Tri. Chennai)] which held that '7. On consideration of the submissions made, we notice that the aspect pertaining to includibility of "royalty charges" cannot be disputed in view of the ruling rendered by the Hon'ble Supreme Court and the Tribunal decision noted above. The learned Counsel has made fervent appeal for the exclusion clause of the interpretative rules which according to him has been accepted by the Commissioner (Appeals). The learned Counsel relied upon the typed papers in the paper book which is said to be the ruling of US and Finland export valuation book. The authenticity of these is not proved. It does not have persuasive value as in the case of HSN explan....
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..... In that matter, there was no requirement for rejection of the declared value in the absence of any other allegations. 10. If the licence fee was intended as a consideration solely for the right to reproduce the contents in India or was payable on account of transfer of rights for distribution in India, it is only reasonable to infer that the payment would be linked to the earning s or to the number of targeted 'eyeballs'. We find from the contract that the royalties are related to the number of episodes. There is also no justification to conclude that the said royalty/licence fee may include consideration for reproduction or distribution rights. The Hon'ble High Court of Madras in Indo Overseas Films v. Union of India [2007 (210) ELT 348 (Mad.)] by ' 6. It could be seen from the invoice made available at page No.3 of the typed set of papers that the petitioner has imported the feature film-"Web of Silence-AIDS". The cost of the materials, i.e., one 35 mm (2569 meters length) is valued at 1000 US $ an d in 35 mm of trailer (35 mm length) of the said film is 20 US $. So, the value of the imported goods, i.e., feature film is 1020 US $. Apart from that royalty including one new p....
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....nce of discharge of burden of proof for seeking exclusion from such part of the royalty, the entire royalty would have to be added to the assessable value. The enhancement of value must sustain. 11. The claim of the appellant for not invoking the extended period does not find much favour and the reliance placed on the decision of the Hon'ble High Court of Bombay in re Star Entertainment Pvt Ltd which noted the decision of the Hon'ble Supreme Court in Continental Foundation Joint Venture v. Commissioner of Central Excise, Chandigarh - I [2007 (216) ELT 17 7 (SC)] that '10. The expression "suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of f acts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under Section 11A....