Related-party import valuation: transaction value stands unless price influence or value shifting is proved with concrete evidence.

Related-party imports of software cannot have their declared transaction value rejected merely because it is lower than a retail list price or reflects sales at a different commercial level; the relationship between buyer and seller matters only if it is shown to have influenced the price. The declared value was therefore accepted. Corporate Service Charges paid to the foreign supplier were not includible in assessable value on the material before the authorities, because there was no concrete evidence that the import price had been depressed or that value had been shifted into the service charges. The valuation adopted below was set aside and consequential relief followed.

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Issues: (i) whether the assessable value of imported software could be rejected and reworked on the basis of the retail list price instead of the declared transfer price, and (ii) whether Corporate Service Charges paid to the foreign supplier were required to be added to the value of the imported goods.

Issue (i): whether the assessable value of imported software could be rejected and reworked on the basis of the retail list price instead of the declared transfer price

Analysis: The declared value could not be rejected merely by comparing it with list prices meant for retail sales or with sales at a different commercial level. The evidence showed discounts to unrelated buyers and also indicated that sales to a distributor could not be equated with sales to individual purchasers. Under the valuation rules, relationship between buyer and seller does not by itself justify rejection of the transaction value unless the relationship is shown to have influenced the price.

Conclusion: The rejection of the declared price on the basis of list price was unsustainable and was set aside in favour of the assessee.

Issue (ii): whether Corporate Service Charges paid to the foreign supplier were required to be added to the value of the imported goods

Analysis: The record showed that the foreign supplier rendered several group-level and support services, but there was no finding that the charges were disproportionate to the services or that they were shown to be a disguised part of the import price. The customs authorities did not establish, with concrete evidence, that the declared import price had been depressed by shifting value into the service charges. Mere linkage of the services with the business relationship was insufficient for inclusion in assessable value.

Conclusion: No addition on account of Corporate Service Charges was justified on the material before the authorities, and the demand was set aside in favour of the assessee.

Final Conclusion: The valuation adopted by the lower authorities was overturned, the declared value was accepted, and the assessee obtained consequential relief.

Ratio Decidendi: In valuation of related-party imports, transaction value cannot be discarded on the basis of retail list price alone, and ancillary service charges can be added only where the department proves with tangible evidence that value has been shifted from the goods to the services.

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