2008 (5) TMI 507 - AT - Customs

Tribunal overturns Revenue decision on import value, upholds discount for repeated buyer.

The tribunal set aside the Revenue's decision to reject the transaction value of imported 'glow in the dark PVC insects' and adopt a higher value. It ... Valuation - Undervaluation Issues:- Enhanced value of imported items- Rejection of transaction value based on past imports- Discount given by supplier- Contemporaneous import evidence requirementEnhanced value of imported items:The appellate tribunal addressed the issue of the authorities below enhancing the value of imported 'glow in the dark PVC insects' from the declared unit price. The appellant contended that as a repeated buyer, they received a further discount from the supplier, which was supported by a letter from the supplier confirming the special pricing offered to the importer. The tribunal noted that the discount given by the supplier was not disputed, and the transaction value was not in question. Therefore, the tribunal found the Revenue unjustified in rejecting the transaction value and adopting a higher value, emphasizing that offering lower prices to repeat buyers is a common business practice. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the appellant.Rejection of transaction value based on past imports:The Commissioner (Appeals) rejected the transaction value on the grounds that the appellant did not provide evidence of contemporaneous import of identical goods at a lower price. However, the tribunal disagreed with this reasoning, stating that since the transaction value was not disputed and the discount given by the supplier was not doubted, the rejection of the transaction value was unwarranted. The tribunal emphasized that the special pricing offered to the importer should not be rejected solely based on the lack of contemporaneous import evidence, especially when the discount given by the supplier was clear and undisputed.Discount given by supplier:The tribunal highlighted the crucial aspect of the discount given by the supplier to the appellant as a repeated buyer. The letter from the supplier explicitly mentioned offering the best price and cutting down profit to provide a competitive price to the importer. The tribunal noted that the lower authorities did not dispute the authenticity of this letter and recognized that the discount was specifically for the importer. This acknowledgment played a significant role in the tribunal's decision to overturn the rejection of the transaction value and rule in favor of the appellant.Contemporaneous import evidence requirement:The tribunal addressed the requirement imposed by the lower authorities for the appellant to provide evidence of contemporaneous import of identical goods at a lower price to support the special pricing offered by the supplier. The tribunal found this requirement unjustified, emphasizing that the transaction value was not in dispute, and the discount given by the supplier was clear and accepted. The tribunal concluded that the rejection of the transaction value based on the lack of contemporaneous import evidence was not warranted, leading to the decision to set aside the impugned order and grant relief to the appellant.