TaxTMI 
TaxTMI 
2015 (12) TMI 1043
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.... (ii) It concedes that the supplier was related person and therefore Revenue was justified in having a reasonable doubt about the declared value. (iii) The loading has been ordered on the ground that the price charged by the supplier from the independent parties was12.5% higher than the price charged from the appellant. However, in the table given in para 6 and 14 of the impugned order, it is nowhere indicated whether the price charged from the retail importers was in relation to the imports around the same time and at the same level and for the identical goods. (iv) The imports made by the retailers (the price paid by whom was compared with the price charged from the appellant) were in the range of about 29 to 48 watches per year while the imports made by the appellant were 1859 watches in the year 2012-13 and 2398 watches during 2013-14 which shows that the level of imports were vastly different and hence not comparable. (v) The role of a distributor is substantially different and the distributor is also required / expected to arrange marketing, distribution & domestic logistics, advertising & promotion and keep stock of goods. It cited the judgme....
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....nation of Value of Imported Goods) Rules, 2007. As has been indicated, such expenses came to about 12.5% of the total value of imports. Ld. DR cited the case of Matsushita Television and Audio (I) Limited vs. CC - 2007 (211) ELT 200 (SC) to support the proposition that payment of continuing royalty was a condition of sale and includible in the assessable value. 4. We have considered the contentions of both sides. At the very outset, it is pertinent to note that the appellant has conceded that the appellant and the supplier being related persons and Revenue was justified in having reason to doubt the truth or accuracy of the value declared. In terms of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rule, 2007, this is sufficient to allow determination of value as per Rules 4 (onwards) of the said Valuation Rules. 5. Both sides argued at length about includibility/ non includibility of the expenses on advertising and sales promotion etc. made by the appellant in the assessable value. Both sides submitted several judgments in support of their respective contentions. While the appellant asserted that such expenses were not a condition of sale and were....
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....s the goods being valued shall be used to determine the value of imported goods. (c) Where no sale referred to in clause (b) of sub-rule (1), is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both, adjusted to take account of the difference attributable to commercial level or to the quantity or both, shall be used, provided that such adjustments shall be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments, whether such adjustment leads to an increase or decrease in the value. (2) Where the costs and charges referred to in sub-rule (2) of rule 10 of these rules are included in the transaction value of identical goods, an adjustment shall be made, if there are significant differences in such costs and charges between the goods being valued and the identical goods in question arising from differences in distances and means of transport. (3) In applying this rule, if more than one transaction value of identical goods is found, the lowest such value shall be used to determine the value of imported goods." ....
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....ot particularly on that aspect; we are only concerned with the determination whether loading has been done in conformity with the requirements of Rules 4 of CVR, 2007. We find that even in the limited comparison (for only 2 models of watches) as given in tables in paras 7 and 14 of the impugned order for the purpose of loading the value by 12.5% there is complete disregard of the requirement of adjustment to be made for differences in commercial levels as well as in the quantity of goods imported and therefore, we do not find the loading of 12.5% to be in conformity with the requirements of Rule 4 of the CVR. This conclusion is supported by CESTAT decision in the case of Hewlett Packard Ltd. (supra) wherein it was inter-alia held as under: "....In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time-the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (i) the deductive value for identical goods or similar goods;....