Royalty Payment at 4% on Net Sales Not Includable in Import Value Under Customs Valuation Rule 10(1)(c)

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....CESTAT ruled against inclusion of 4% running royalty in transaction value of imported goods under Rule 10(1)(c) of Customs Valuation Rules, 2007. The Tribunal found that royalty payments were not directly related to imported goods, as they were calculated on net sales value of manufactured products. The goods were not procured from the group company, and no conditions mandated royalty payment for sale. The Explanation to Rule 10(1)(c) requires royalty to be paid for a process applied to imported goods, which was not applicable here. Since royalty was neither paid nor payable specifically for imported goods, and no sale conditions existed, CESTAT held its addition to import value was incorrect. Appeal allowed with order setting aside Commissioner's decision.....