Related-party customs valuation: declared import price stands absent proof that relationship influenced the transaction value.

Imported goods priced under long-term governmental arrangements were examined for related-party valuation under the Customs Valuation Rules, 2007. The record did not establish the specific relationship contemplated by Rule 2(2), and there was no evidence of control, partnership, flow-back, or other material showing that any assumed relationship influenced the price. Applying Rule 3(3)(a), related-party transaction value remains acceptable where the circumstances of sale do not indicate price influence, and the department failed to prove otherwise. The declared value therefore could not be rejected, and the demand for differential duty, interest, and penalties was unsustainable.

---

---

Issues: Whether the importer and the overseas supplier were related persons under the Customs Valuation Rules, and if so, whether the declared import price was influenced by that relationship so as to justify rejection of transaction value and demand of differential duty.

Analysis: The import arrangements arose from long-term governmental and inter-governmental agreements, with fixed pricing for the relevant period and no evidence that the parties occupied the specific relationship contemplated by Rule 2(2) of the Customs Valuation Rules, 2007. The record also did not establish control, partnership, or any flow-back or other material showing that the relationship, even if assumed, influenced the price. Under Rule 3(3)(a), related-party transaction value remains acceptable where the circumstances of sale do not show price influence, and the department failed to discharge the burden of proving otherwise.

Conclusion: The declared value could not be rejected, and the demand of differential duty, interest, and penalties was unsustainable.

---