Customs valuation cannot include unsupported commission loading when actual transfer charges are specifically proved.

Customs valuation of imported machinery could not be enhanced by adding commission charges on a uniform percentage basis where the only actual transfer charge proved was US $ 500 for documentation and communication expenses. In the absence of any commission agent arrangement, and with the actual transfer cost specifically established, the authorities had no basis to load value by 3% or 2% as reduced in appeal. The addition to assessable value was held unsustainable, and the duty collected on the added amount was directed to be refunded to the assessee.

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Issues: Whether the Customs authorities were justified in loading the assessable value of the imported machinery by adding commission charges on a uniform percentage basis when the actual amount charged on transfer was only US $ 500 towards documentation and communication expenses.

Analysis: The amount actually charged on transfer of the machine was admitted to be US $ 500 only. The addition of 3% by the Customs authorities, or 2% as reduced in appeal, was made on a uniform basis without reference to the actual cost or commission. In the absence of any commission agent arrangement and where the actual transfer charge was specifically proved, there was no justification for such an addition to the value.

Conclusion: The addition over and above Rs. 18,350/- was not sustainable, and the duty collected on that added amount was directed to be refunded to the assessee.

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