Hon'ble Judges/Coram:
Ramesh Nair, Member (J) and Raju

ORDER

Raju, Member (T)

1. M/s. Husco Hydraulics Pvt. Ltd. (M/s. HHPL in short) entered into agreements with M/s. Husco International, INC, USA. There were two agreements. Licence agreement dated 1-4-2007 and engineering service agreement dated 1-1-2007. In terms of these agreements, M/s. HHPL imported certain goods from M/s. Husco International, Inc., USA. The case was picked up by the Mumbai Customs (GATT) Special Valuation Branch, NCH, Mumbai and after examining the contract it was held vide order No. 108/AC/SVB/BR/2008-09, dated 30-6-2008 that-

(i) HHPL and Husco International, USA are related in terms of Rule 2 of Customs Valuation (Determination of Value of Import Goods) Rules, 2007.

(ii) Invoice value of goods imported was enhanced by royalty equal to 3% of the importer's selling price of the licensed products defined in the licence agreement dated 1-4-2007 under Rule 4 read with Rule 9(1)(c) of the Customs Valuation Rules, 2007 for the period from 10-10-2007 till expiry of three years from the date of issue of orders.

1.1 Subsequently, M/s. HHPL approached for the periodical review of the said order-in-original dated 30-6-2008 and submitted the necessary documents and affidavit to the effect that there was no change in the invoicing pattern, etc. After examination of the facts, the Assistant Commissioner, GATT Valuation Cell, New Customs House observed as follows :

"15. I find that the importer has also submitted letter from the related supplier Husco International Ltd., UK wherein the Husco International Ltd., UK certified that the price charged in the invoices raised by Husco International Ltd., UK on M/s. Husco Hydraulics India Pvt. Ltd. For the supply of the goods are at international prices which are computed on the basis of all costs and representative profit. Hence, I find that the transaction value of the goods is acceptable under Rule 3(3)(a) of Customs Valuation (Determination of Value of Import Goods) Rules, 2007.

16. I find that the importer has vide letter dated 31-5-2013 and 20-9-2013 submitted that in certain cases goods (Raw material/capital goods) are procured from group entities and such goods are not manufactured by the group suppliers but are procured from other vendors and then sold to Husco India. In respect of the same they have demonstrated that there is a price difference/margin of about 7 to 11% in prices at which goods are procured by group companies vis-a-vis prices at which such goods are sold to Husco India. Therefore, from the above demonstration, I find that the transaction value of the goods is acceptable under Rule 3(3)(a) of Customs Valuation (Determination of Value of Import Goods) Rules, 2007.

17. However, as far as issue of addition to the assessable value of the goods under Rule 10(1)(c) of Customs Valuation (Determination of Value of Import Goods) Rules, 2007 or under erstwhile Rule 9(1)(c) of Customs Valuation Rules, 1988 is concerned, I find that the importer is making payments towards royalty as per the licensing agreement. I find that the question of inclusion of the said payment in the assessable value of the goods as per the relevant provisions of Customs Valuation Rules was elaborately discussed in the earlier order-in-original. I find that the learned Assistant Commissioner of Customs has passed a speaking order and held that the royalty payment is includible in the assessable value of the goods. I find that the present order is a renewal order and is therefore, based on the earlier order-in-original. I find that no change in the terms and conditions of license agreement has been brought about by the party at the present stage. Moreover, from the documents available, I find that the said order-in-original has not been appealed against by the party. Further, the importer has vide affidavit confirmed that they are following consistent invoicing pattern for the Husco group products being imported by them. Hence, in the light of the above facts and circumstances, I fin........