AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 509
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....ort price of urea was around US$ 410 per M.T., M/s. Indian Farmers Fertilizer Co-operative Limited (hereinafter referred to as 'IFFCO') had imported urea from M/s. Oman India Fertilizer Company, Oman (hereinafter referred to as 'OMIFCO') at about US$ 160 per M.T. A study of the imports made from OMIFCO further revealed that the said company was a joint venture between the Oman Oil Company (50% share), IFFCO (25% share) and KRIBHCO (25% share). Further, the import of urea from the said company was on the basis of a long term urea off-take agreement (UOTA) between the Government of India and OMIFCO. Urea was purchased by the Department of Fertilizers, Government of India from OMIFCO and the imports were made by IFFCO and KRIBHCO on the basis of an agreement for handling and marketing of urea signed between the Department of Fertilizers, IFFCO and KRIBHCO.O 3. As a follow up action, statements were recorded and thereafter, Show Cause Notices dated 20.06.2014 and 08.07.2014 were issued, proposing to reject the declared values of Rs.45,72,70,769/- in respect of 37513.092 M.T. of urea and Rs.67,17,02,450/- in respect of 65882.14 M.T. of urea and re-determine the same at Rs.69,68,56,526/....
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....rty to the agreement, to hold that the declared value was in order and that the relationship of any of the parties did not influence the import value. 9. After hearing both sides, we find that the only issue to be decided by us is: whether the impugned orders by which the further proceedings were dropped are in order? 10. We have gone through the documents placed on record, the impugned orders as well as the orders relied upon during the course of arguments. 11. In its latest order dated 07.08.2023 [2023 (8) TMI 561 - CESTAT, Ahmedabad] (in Customs Appeal No. 11629 of 2018), the Ld. Ahmedabad Bench of the CESTAT in the respondent's own case has, following its own earlier order (supra), held as under:- "2. The issue involved in the instant case is, if the appellant importer and foreign base supplier namely Oman India Fertiliser Company, Oman (in short OMIFCO) are related or otherwise. The matter has been examined earlier by Tribunal order A/11354-11358/2022 dated 11.11.2022, wherein it has been held that IFFCO and OMIFCO are not related parties. In the said order following has been observed: 9. Heard both sides and gone through the facts, documents and case laws relied upon a....
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....ia Fertilizer Company LLC ( OMIFCO) was formed with equity participation as envisaged in the MOU, i.e KRIBHCO - 25%, IFFCO - 25% and Oman Oil Ltd. - 50%. In addition, in the Board of Directors of the new company there is equal number of Directors nominated by either side. It is evident that the GOI and Sultanate of Oman have protected their interest conceived behind MOU signed between them by way of assigning the rights and responsibilities to the entities under each. We also find from the records and details submitted by the Appellants that as per the note of discussion of the meeting held on 20.12.1999 and 27.12.1999 of the Public Investment Board of the GOI vide paragraph 8 thereof that the imports made under the projects would be on GOI account and that under UOTA the Indian Sponsors ( Appellants) have been designated as agents of GOI. In OMIFCO,, though equity participation is by the Appellants and Directors are nominated by them it is evident that the real person behind the project is the GOI as far as the India side is concerned and that the entities are only agents. 10.1 We also find that as per the clause 2.1 of Urea Off-Take Agreement (UOTA) as regards supply and sales ....
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....r's businesses; (ii) they are legally recognized partners in business; (iii) They are employer and employee; (iv) any person directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them are directly or indirectly controlled by a third person; (vii) together they directly or indirectly control a third person; or (viii)they are members of the same family. Explanation 1. - The term "person" also includes legal persons. Explanation 2. - Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionare, however described, of the other shall be deemed to be related for the purpose of these rules, if they fall within the criteria of this sub-rule." From the above, it is seen that in sub-clauses (i) to (viii) of Rule 2 (2) of CVR, 2007 indicates that each of these sub-clause deals with different means of establishing deemed relationship between two persons. In terms of Rule 2(2)(i) persons can be deemed to be related only if they are officers or directors of one another's business. In t....
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....nd that declared prices cannot be reviewed without any evidence to the effect that the relation between the appellants and sellers has influenced the declared price or to the effect that there was a flow back of money from the importer to the related supplier. Therefore, we don't find any substance to sustain the impugned orders. 15. Without prejudice, We also find that though the importer Appellants and GOI and Suppler of goods OMIFCO are related in terms of Rule 2(2) of the Customs Valuation Rules, 2007; declared value of the imported goods shall continue to be accepted as transaction value under Rule3(3)(a) of the CVR, 2007. For the sake of reference said rule is reproduced below. (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. 15.1 We find that alleged relationship between the Appellants/ GOI and OMIFCO has not influenced the price of the imported goods. Urea- Off -Take agreement and Ammonia- off - Take agreement both are long term international contract finalized between two sovereign countri....
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....012 (284) ELT 294 (Tri) (ii) Gemplus India Pvt. Ltd. Vs. CCE- 2005 (185) ELT 269 (Tri.) (iii) CC Vs. Hewlett Packard Ltd. - 1999 (108) ELT 221 (Tri.) (iv) Volvo India Pvt. Ltd. Vs. CC -2005 (180) ELT 489 (v) Modi Senator (I) Pvt. Ltd. Vs. CC (Import & General), New Delhi - 2009 (247) ELT 313 (Tri. Del.). Affirmed by the Supreme Court in 2010(256)ELT A19(S.C.) (vi) Nestle India Ltd. Vs. Commissioner of Customs- 2010(252)ELT 208 (Tri. Chennai). 16. From the forging, it is clear that even if it is assumed that the buyer and seller are related in terms of Rule 2 (2) of valuation Rules, 2007 read with explanation II of said Rule, the price at which the goods were purchased from OMIFCO is the true transaction value and not influenced by their relationship. In the present matter Department has also not produced any evidence to show that the relationship between the parties has influenced the price. Therefore, we find that the reasons for rejecting the transaction value is not in consonance with law and therefore liable to be set aside. 17. We also find that the issue in question involved in the present case on the similar facts and MOU and agreements has also already been de....