2008 (4) TMI 113

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....sal of the appeal, we take up the appeal. 2. Under a Franchise Agreement dated 5-4-1998, the appellants had obtained technical know-how from M/s. Marrybrown Fried Chicken SDN, BHD, Malaysia for their Fast Food Restaurants in India. The agreement made them liable to pay licence fee/technical know-how fee of US$ 25,000 to the Malaysian company. It also obligated them to pay a sum of US$ 82,500 as franchise fee to the said company for use of patents, trademarks, brandnames etc. of the latter in India. Further, the appellants were also liable to pay royalty @ 2% for the first five years and thereafter @ 3% on the monthly gross sales of the licensed product. The appellants imported "Chicken Flavouring" and "Chicken Mix Seasoning" from the Mal....

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....brandname etc. of the supplier were a condition of sale of the said goods and, therefore, all the fees paid by the assessee to the foreign supplier are addable to the invoice value of the goods under Rule 9(1)(c) for the purpose of payment of duty. Under the Franchise Agreement, the franchisee (assessee) obtained from the franchisor (Malaysian supplier) the right to carry out in India the business of providing services (including sale of the licensed products). These products must be in accordance with the specifications, recipes and ingredients supplied/guaranteed by the franchisor. The licensed products shall be purchased by the franchisee from the franchisor only. All necessary food ingredients (apart from containers, cartons, boxes, nap....