2019 (1) TMI 192

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....ected the Appeal filed by the department and upheld the Order-In-Original dated 25.2.2011 passed by the Deputy Commissioner of Customs, Gatt Valuation Cell, Mumbai. 2. The issue to be determined in this Appeal is whether the relationship between the parent company i.e. the supplier from abroad and their subsidiary company i.e. the respondent herein, has influenced the import price or not and whether the department is justified in rejecting the transaction value? 3. We have heard ld. Authorised Representative appearing for the Revenue and the General Manager (Finance) appearing for the respondent and perused the record. 4. Although the respondent has produced the documents to show that the parent company had added 11% profit to the ....

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....on Part Approval Process i.e. PPAP Approval. The payments of the contract price to the seller shall be made in US Dollars within 90 days after PPAP approval. Total contract price shall be the fixed amount of US$ 2,212,491 (Two millions two hundred twelve thousand four hundred ninety one only) on the basis of DDU (Inco terms 2000) and it can't be changed during the contract period. As per the terms of contract, if it is necessary to change the contract toolings or buy additional toolings, only then it is possible to change the contract price by mutual agreement. The goods supplied by the parent company to the respondent are the capital goods used in the manufacture of final product i.e. chasis designed by them. These goods can't be used by a....

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.... M/C Weltop Technos Corporation 2 CKKD10222 35482 31934 6. There is no dispute that the respondent and the supplier are related in terms of Rule 2(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. In such cases Rule 3(3) ibid provides as under:- "(3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) 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 v....

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....ination of Value of Imported Goods) Rules, 2007. Where the buyer and seller are related, assessable value of the imported goods is determined only in accordance with the provisions of Rule 3(3) of Customs Valuation Rules, 2007 which mandatorily require that where the buyer and seller are related and where the circumstances of the sale indicated that the relationship has not influenced the price of the imported goods, the transaction value has to be accepted. Unless the price actually paid for the transaction falls within the exceptions, Customs authorities are bound to assess the duty on the transactional value. The learned Commissioner (Appeals) has given detailed finding in this regard, which is reproduced below:- "The importer has ent....

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....f profit arrived at by the respondents at the rate of 11% is not justified. 2. Heard both sides. During the course of argument Revenue has failed to provide on what basis they are saying that the margin of profit is more than 11%. Therefore, we do not find any merit in the Revenue's application. Accordingly the same is dismissed." 8. We find that there is no specific reason for the revenue for disregarding the transaction value, other than the suspicion that the profit margin is more than 11%. The Revenue failed to produce any evidence before any of the authorities below in support of its contention. Nor they produced any evidence in that regard before us. They also did not produce any document about contemporaneous import at a higher....