Related-person status requires proof of price influence, and declared import value cannot be enhanced on equity participation alone.

Mere equity participation or board representation does not, by itself, establish related-person status or justify rejection of transaction value under the Customs Valuation Rules unless there is evidence that the relationship influenced the price. The Tribunal found no independent evidence supporting enhancement of the declared import value and agreed that the record did not show the requisite degree of ownership or price influence. The declared value was therefore accepted and the Revenue's challenge failed.

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Issues: Whether the declared import value could be enhanced on the ground that the supplier and importer were related persons merely because of equity participation and board representation.

Analysis: The adjudicating authority had treated the supplier and importer as related persons under Rule 4(2)(d) of the Customs Valuation Rules, 1988 and enhanced the value by 20%. The first appellate authority, on the facts, found that the record did not establish 100% equity participation and that mere equity participation or directors on the board, without evidence that the relationship influenced the price, was insufficient to reject the declared value. The Tribunal agreed that no independent evidence was brought on record to justify the enhancement and that relationship by itself did not prove price influence.

Conclusion: The enhancement of import value was not justified and the declared value was rightly accepted; the appeal of the Revenue failed.

Ratio Decidendi: Mere equity participation or representation on the board does not by itself establish related-person status or justify rejection of transaction value unless it is shown that the relationship influenced the price.

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