Transaction value cannot be enhanced on shareholding alone without proof of mutuality of interest between buyer and seller.

Declared transaction value of imported goods could not be rejected merely because the foreign collaborator held 50% equity in the importer. Enhancement of customs value requires proof of a related-person relationship based on mutuality of interest and reciprocal commercial control; mere shareholding, nominee participation, or collaborative involvement is insufficient without independent evidence that each party has a corresponding business interest in the other. In the absence of such proof, the declared value remains acceptable and cannot be enhanced on that ground.

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Issues: (i) Whether the declared transaction value of imported goods could be enhanced on the sole basis that the foreign collaborator held 50% equity in the importer company and the parties were related persons.

Analysis: The enhancement was founded only on shareholding parity and no independent evidence showed that the foreign collaborator controlled the importer or that the importer had any corresponding interest in the business of the foreign supplier. The decision turned on the requirement of mutuality of interest, namely a two-way interest between buyer and seller, for rejection of transaction value under the valuation law. Mere shareholding and, by itself, the existence of nominee or collaborative participation was held insufficient to establish the statutory relationship, and the absence of third-party control over both entities also negatived the case for discrediting the declared value.

Conclusion: The relationship was not established, so the declared transaction value could not be rejected or enhanced on that ground.

Final Conclusion: The order enhancing import value was unsustainable and the assessee succeeded in challenge to the valuation.

Ratio Decidendi: Rejection of transaction value under customs valuation requires proof of mutuality of interest between buyer and seller, and shareholding alone, without evidence of reciprocal commercial interest or control, does not establish a related-person relationship.

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