Related-person valuation fails without proof of price influence or comparable import evidence

30% shareholding by a foreign supplier in an Indian importer did not, by itself, establish mutuality of interest or make the parties related persons under the Customs Valuation Rules, 1988. Without evidence that the relationship influenced the declared price, and without contemporaneous imports of identical goods at higher prices to support comparison, rejection of the transaction value and resort to an alternative valuation method was not justified. The enhancement of assessable value was therefore held unsustainable, and the issue was decided in favour of the assessee.

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Issues: Whether the enhancement of assessable value of imported goods was sustainable on the basis that the foreign supplier and the Indian importer were related persons and, consequently, whether valuation could be redetermined under the Customs Valuation Rules, 1988.

Analysis: The foreign supplier's 30% shareholding in the Indian importer, by itself, did not establish mutuality of interest or prove that the buyer and seller were related persons. The Revenue also failed to produce contemporaneous imports of identical goods at higher prices from other importers. In the absence of proof that the relationship influenced the price or of supporting comparative import evidence, rejection of the declared value and recourse to the alternative valuation method was not justified.

Conclusion: The enhancement of assessable value was not sustainable and the issue was decided in favour of the assessee.

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