Facts
The appeal is filed by the Department against the order passed by Commissioner (Appeals) who upheld the order of the original authority that technical know-how fee or royalty paid by the Respondent to the foreign collaborator is not to be included in the assessable value of the imported goods for discharging the duty.
Submissions
Authorised Representative Anandalakshmi Ganeshram appearing for the Department submitted that an earlier Order-inOriginal in respect of valuation of goods imported by Respondent was initially investigated by SVB and an order was issued accepting the invoice value of the imported goods. Against this order, the Department filed an appeal before the Commissioner (Appeals) and vide order No. CC581/2009, the Commissioner (appeals), rejected the appeal of the Department.
Counsel for the respondent/importer M. Kannan appeared and argued for the respondent. It is submitted that the issue relates to whether the payment of royalty and lumpsum fee are includable in the assessable value of the imported goods or not. The respondent had imported the components required for the manufacture of Induction heating equipment and subjected themselves to SVB investigation procedure due to their imports being from the related foreign supplier, GH. Electrotermia, Spain.
Decision
The two member bench of Sulekha Beevi C.S., Member (Judicial) and Vasa Seshagiri Rao, Member (Technical) noted that the Royalty or Technical Knowhow Fee based on the net sales price of all domestic sales of the licensed articles. Further, the respondent is permitted to purchase components from other parties also. There is no restriction that the appellant has to procure the raw materials / capital goods only from the foreign supplier.
The Tribunal said that it has been categorically needed that the Royalty paid by the appellant to their foreign collaborator does not satisfy the twin conditions of Rule 9(1)(c) that cannot be included in the assessable value of the imported goods.
It further stated that moreover, it is also brought forth that the Department has not filed any appeal against the orders passed in the earlier round of valuation which has been accepted. For this reason also, the appeal cannot sustain.
Case title: The Commissioner of Customs v/s M/s. GH Induction India Pvt. Ltd.
Citation: Customs Appeal No. 42516 of 2013
