Commercial discount in import valuation was upheld for an exclusive agent where the concession matched contractual sales and support obligations.

A commercially justified 25% discount extended by a foreign supplier to an exclusive commercial agent for imported spares, including resale and warranty replacements, was treated as a normal commercial concession and not an abnormal adjustment in valuation. The appellant's obligations to promote sales, advertise, provide after-sales support, maintain inventory, and meet minimum order requirements supported the discount's genuineness. The valuation benefit was allowed, the appellate order was set aside, and the original authority's order was restored.

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Issues: Whether the 25% discount extended by the foreign supplier to the appellant for spares imported for resale and warranty replacements was liable to be disallowed in valuation.

Analysis: The appellant was appointed as an exclusive commercial agent and was required to undertake sales promotion, advertisement, after-sales support, maintain inventory, and meet minimum order requirements. The original authority had accepted that the discount was reasonable in view of these commercial obligations and the appellant's distributor status. On the facts, the discount was found to be a normal commercial concession and not an abnormal one.

Conclusion: The 25% discount was held to be allowable and the Commissioner (Appeals) was set aside. The original authority's order was restored.

Final Conclusion: The appeal succeeded and the appellant obtained the valuation benefit claimed on the disputed discount.

Ratio Decidendi: A commercially justified discount extended to an exclusive commercial agent for specified resale and warranty spare imports cannot be treated as abnormal merely because the supplier and importer are related persons.

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