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PM-STIAC discusses accelerating Industry-Academia Partnership for Research and InnovationIndia, Singapore hold dialogue over cyber policy44 bids received under 10th Round of Commercial Coal Mine AuctionsCops arrest former Dy PM of Nepal in cooperative fraud casePuri highlights India's Petrochemical potential at India Chem 2024UN reports record high cocaine production in ColombiaMinister unveils 'Aviation Park' showcasing India's Aviation HeritageED finds PFI wanted to start Islamic movement in IndiaBlocking Credit - Rule 86ASEBI says investors can use 3-in-1 accounts to apply online for securitiesI-T- Penalty u/s 271(1)(b) need not be imposed when assessee moved an adjournment application & later complied with notice u/s 142(1): ITAT4 Kanwariyas killed as vehicle runs over them in Banka, BiharI-T- Accounting principles do not prescribe maintaining of a day-to-day stock register, and the books of accounts cannot be rejected on this basis alone: ITATUN food looted and diverted to army in EthiopiaCus - Alleged breach of conditions for operating public bonded warehouse; CESTAT rightly rejected allegations, having found no evidence of any such breach: HCUS budget deficit surges beyond USD 1.8 trillionST - Onus for proving admissibility of Cenvat Credit rests with service provider under Rule 9(6) of the Cenvat Credit Rules, 2004: CESTATIf China goes into Taiwan, Trump promises to impose additional tariffsRussians love Indian films; Putin lauds BollywoodCus - Classification of goods is to be determined in accordance with Customs Tariff Act & General Interpretative Rules; Country-of-Origin Certificate may offer some guidance, but cannot solely dictate classification: CESTATCus - Benefit of such Country-of-Origin certificates cannot be denied if all relevant conditions are met under the applicable Customs Tariff rules: CESTATCuban power grid collapses; Country plunges into darknessCus - As per trite law, merely claiming a classification or exemption does not constitute mis-declaration or suppression - any misclassification does not equate to willful intent to evade duty: CESTATKarnataka mulling over 2% fee on aggregator platforms to bankroll gig worker welfare fundCus - Extended limitation cannot be invoked in case of assessee who is a regular importer with a consistent classification approach: CESTAT
 
Cus - Respondent was liable to pay royalty to Licensor even when they imported raw material from anybody else and do not at all import same from related foreign supplier - allegation that payment of royalty is relatable to goods and is a condition for sale of goods cannot be sustained: CESTAT

By TIOL News Service

MUMBAI, APRIL 27, 2016: THIS is a Revenue appeal.

Revenue is aggrieved by the order of Commissioner (A) on the ground that first appellate authority has not enhanced the value of goods imported by the importer respondent despite the fact that the goods were imported from their sister/related company.

The Bench noted that the appellate authority had inter alia recorded the following findings:

"11. I find that the Appellants are manufacturers of goods in India. They are required to utilize the raw material in the manufacture of their goods and upon the sale of the goods, they are required to compute the royalty payment as per the above definition and article to the supplier. I find that there is no express/implied condition in the Agreement inferring that the appellant is under any contractual obligation to import the raw material for manufacturing the final products from the Licensor/Bekaert, Belgium the related supplier only. The Appellant is free to import the raw material from the licensor or any anybody else. The Licensee is liable to pay royalty to the Licensor (Bekaert, Belgium) even when the licensee (the Appellant) imports the raw material from anybody else and do not at all import the same from the related foreign supplier. In such a situation, the condition that the payment of royalty is relatable to the imported goods and is a condition for sale of goods cannot be sustained in law. Thus, there is no nexus between the royalty payment and the import of components."

Observing that as against the recorded factual findings of the Commissioner(A), the revenue had not controverted the facts as also the following, the CESTAT held -

"The finished goods are manufactured by Technical knowhow from their sister/related company; nothing was brought to our notice that the agreement for technical knowhow between the importer respondent and their related person supplying the goods or finding that raw material needs to be purchased from the related person only. In the absence of any such restrictive Clause, we find that the first appellate authority was correct in coming to a conclusion that the loading of value by an amount paid as royalty seems to be incorrect, is, in our view the correct decision and does not require any interference."

The impugned order was upheld and the Revenue appeal was rejected.

(See 2016-TIOL-996-CESTAT-MUM)


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