Advertising, Marketing and promotion (‘AMP’) expenses incurred by Importer not required to be added in value of imported goods; Appeal dismissed by SC
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- Last Updated on 21 July, 2021
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Case details: Commissioner of Customs v. Indo Rubber and Plastic Works - [2021] 128 taxmann.com 276 (SC)
Judiciary and Counsel Details
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- A. M. Khanwilkar and Sanjiv Khanna, JJ.
- N. Venkataraman, ASG, Mukesh Kumar Maroria, AOR, Rupesh Kumar, Abhishek Kumar and Adit Khorana, Advs. for the Appellant.
- Nikhil Jain, AOR, Abhishek Rastogi, Pratyush Saha, Vinod Kumar Jain and Satya Prakash, Advs. for the Respondent.
Facts of the Case
The appellant was engaged in importing and distribution of ‘Li Ning’ brand of sports goods. There was nothing in agreement as a pre-condition of sale/import that a fixed amount or fixed percentage of invoice value of imported goods was to be spent by appellant on marketing, advertising, sponsorship and promotional expenses/payments. The department contended that Advertising, Marketing and promotion (‘AMP’) expenses incurred by appellant were required to added in value of imported goods.
However, the Tribunal held that mere making of marketing, advertising, sponsorship and promotional expenses/payments by appellant in consultation with Singapore seller did not attract provisions of Rule 10(1)(e). Moreover, the activity of marketing, advertising, sponsorship and sales promotion was a post import activity and expenses/payments were incurred by appellant on its own account and not for discharge of any obligation of seller under terms of sale and the appellant had not paid any amount on behalf of seller. Therefore, it was held that such expenses/payments made by appellant to promote ‘Li Ning’ brand was not a condition of sale and, hence, same were not liable to be included in value of imported goods in terms of Rule 10(1)(e).
Supreme Court Held
The department challenged the order. The honorable Apex Court observed that there was no merit in the appeal and accordingly, dismissed the appeal.
Cases Review
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- Indo Rubber and Plastic Works v. Commissioner of Customs [2021] 128 taxmann.com 275 (Cestat -New Delhi) (para 1) affirmed.
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