Transaction value in customs valuation stands unless mutual buyer-seller interest is proved; one-sided influence is not enough.

Customs valuation under Section 14 of the Customs Act permits rejection of the declared transaction value only where buyer and seller have mutual interest in each other's business and the price is not the sole consideration. The foreign supplier's shareholding in the Indian joint venture, nominee directors, and transfer of technical know-how did not by itself prove reciprocal interest by the Indian importer in the supplier's business. In the absence of evidence of shareholding, board control, or other controlling interest on the importer's side, mere one-way commercial or managerial influence was insufficient. The declared transaction value therefore could not be rejected on the ground that the parties were related persons.

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Issues: Whether the importer and the foreign supplier were related persons so as to justify rejection of the declared transaction value and enhancement of assessable value.

Analysis: Under Section 14 of the Customs Act, the declared price can be disregarded only when the buyer and seller have mutual interest in each other's business and the price is not the sole consideration. The fact that the foreign supplier held shares in the Indian joint venture, had nominee directors on its board, and supplied technical know-how did not by itself establish reciprocal interest on the part of the Indian importer in the foreign supplier's business. There was no evidence of shareholding, board representation, or other controlling interest of the importer in the supplier. Mere one-way interest or commercial advantage was insufficient to disqualify the transaction value.

Conclusion: The importer and the foreign supplier were not related persons within the meaning of Section 14 of the Customs Act, and the declared transaction value could not be rejected on that ground.

Ratio Decidendi: To displace the transaction value in customs valuation on the ground of relationship, mutual interest between buyer and seller must be established; one-sided commercial or managerial influence is insufficient.

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