Related person test under customs valuation requires proof of mutual interest and price influence, not shareholding alone.

Mere 40% shareholding by a foreign collaborator did not, by itself, establish that the importer and collaborator were related persons under the Customs Valuation Rules, 1988. In the absence of evidence of mutuality of interest, controlling influence, or any price influence arising from the relationship, the declared transaction value could not be rejected and the assessable value could not be enhanced. The challenge relating to the technical know-how fee was not reopened in this appeal. The value enhancement was therefore unjustified, and the Revenue's objection to the declared transaction value failed.

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Issues: Whether the importer and the foreign collaborator were related persons so as to justify rejection of the declared transaction value and enhancement of assessable value under the Customs Valuation Rules, 1988.

Analysis: The foreign collaborator held 40% equity in the importer company, but that fact alone did not establish a related-person relationship or mutuality of interest. The Revenue failed to show that the foreign collaborator had any controlling influence over the importer or that the price was influenced by such relationship. In the absence of proof establishing relationship, the declared transaction value could not be discarded. The challenge regarding technical know-how fee was not open to reconsideration in this appeal.

Conclusion: The enhancement of assessable value was unjustified and the Revenue's objection to the declared transaction value failed.

Final Conclusion: The order setting aside the value enhancement was affirmed and the Revenue's appeal was rejected.

Ratio Decidendi: Mere shareholding by a foreign collaborator, without proof of mutuality of interest or influence on price, is insufficient to treat the importer as a related person for rejecting the declared transaction value.

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