Nestle Lanka PLC Vs. The Director General of Customs and others – CA WRIT NO. 846/08-2010

In the case between Nestle Lanka PLC and the Director General of Customs & K. Ranjan, Deputy Director General of Customs, the court addressed whether royalties and license fees paid under a General License Agreement should be included in the customs value for duty assessment, pursuant to Article 8(1)(c) of Schedule E of the Customs Ordinance (as amended by Act No. 02 of 2003). It was held that such royalties or license fees cannot be included unless shown to be a condition of sale of the imported goods between the importer and the overseas seller. The findings established that the Customs Department failed to comply with mandatory procedures, namely, providing reasoned orders and following statutory steps required for fair inquiry and appeal under section 51A of the Customs Ordinance. The