Related-party customs valuation: declared import value stands unless Revenue proves the relationship influenced the price.

Customs valuation of related-party imports depends on whether the buyer-seller relationship actually influenced the declared price. The text states that transaction value must be accepted unless Revenue proves price influence, and that long-term sovereign pricing arrangements, contemporaneous market parameters, and the absence of any flow back or manipulation supported acceptance of the declared value. It further notes that a prior coordinate bench view, already accepted by the Department, was followed. On that basis, rejection of the import value, together with differential duty, interest and penalties, was unsustainable, and the appeal succeeded with consequential relief.

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Issues: Whether the importer and the foreign supplier were related persons so as to justify rejection of the declared import value and consequent demand of differential duty and penalty.

Analysis: The dispute turned on the relationship between the importer, OMIFCO and the Government of India under the long-term Urea Off-take and Ammonia Off-take arrangements. The applicable valuation framework required the declared transaction value to be accepted even where the buyer and seller are related, unless the circumstances of sale show that the relationship influenced the price. The record showed a long-term pricing structure fixed under sovereign-level arrangements, contemporaneous market parameters, and no evidence that the relationship caused any flow back or price manipulation. The finding in the earlier coordinate bench decision, accepted by the Department, was followed.

Conclusion: The declared value could not be rejected merely on the allegation of related-party relationship, and the demand of differential duty, interest and penalties was unsustainable.

Final Conclusion: The appeal succeeded and the impugned order was set aside with consequential relief in accordance with law.

Ratio Decidendi: In customs valuation, a related-party import can be accepted at the declared transaction value unless the Revenue proves that the relationship actually influenced the price.

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