Related-party customs valuation requires proof that the relationship influenced price, not mere commercial association.

Commercial connection through a joint venture, equity participation, board representation, or long-term supply arrangements does not by itself make the importer and foreign supplier related persons under the Customs Valuation Rules, 2007. The party challenging valuation must prove that the relationship affected the price. In the absence of evidence of flow back, price manipulation, or other material showing influence on the declared value, transaction value remains acceptable under Rule 3(3)(a) even if a related relationship is assumed. The declared transaction value therefore cannot be rejected merely on association or common business structure.

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Issues: Whether the importer and the foreign supplier were related persons under the Customs Valuation Rules, 2007, and whether the declared transaction value could be rejected on the ground that the relationship influenced the price.

Analysis: The relevant relationship clauses under Rule 2(2) were examined on the basis of the joint venture structure, equity participation, board representation, and the long-term supply arrangements. Mere shareholding, participation in the joint venture, or representation on the board did not establish that the importer and supplier were officers or directors of one another, legally recognised partners, or jointly controlled by a third person. The party alleging related-party influence was required to prove that the relationship affected valuation. No material was produced to show any flow back, price manipulation, or other evidence that the declared price was influenced. Even assuming a related relationship, the transaction value remained acceptable under Rule 3(3)(a) because the circumstances of sale did not show price influence.

Conclusion: The importer and the foreign supplier were not to be treated as related persons for valuation purposes, and the declared transaction value could not be rejected.

Final Conclusion: The valuation demand founded on related-party treatment and alleged undervaluation failed, and the assessment based on the declared price stood restored in substance.

Ratio Decidendi: A declared transaction value cannot be rejected merely because the buyer and seller are commercially connected or associated in a joint venture unless the adjudicating authority proves that the relationship influenced the price; the burden lies on the revenue to establish such influence with evidence.

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