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Issues: Whether the declared import value of urea was liable to be rejected on the ground that the importer, the supplier and the Government of India were related persons and that such relationship influenced the price.
Analysis: The issue turned on the Customs Valuation Rules, 2007, particularly the deeming tests of relationship under Rule 2(2)(i), Rule 2(2)(ii) and Rule 2(2)(vi), and the acceptance of transaction value under Rule 3(3)(a) where the relationship does not influence the price. The record showed a long-term, pre-arranged commercial structure under the relevant off-take arrangements, but no material was produced to establish that the relationship affected the declared price or that there was any flow-back or comparable evidence of undervaluation. The burden to prove rejection of transaction value was not discharged, and the consistent earlier tribunal decisions on the same transaction pattern supported acceptance of the declared value.
Conclusion: The declared transaction value could not be rejected, the relationship was not shown to have influenced price, and the Department's appeals were unsustainable.
Ratio Decidendi: Transaction value under the Customs Valuation Rules, 2007 cannot be rejected merely because parties are alleged to be related unless it is established on evidence that the relationship influenced the price.
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