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Issues:
1. Determination of related persons under Customs Valuation Rules. 2. Discrepancy in the valuation of imported CNC tapping machines. Analysis: 1. The first issue pertains to the determination of related persons under Customs Valuation Rules. The Commissioner (Appeals) confirmed the Order-in-Original which loaded the invoice value by 20% based on the assumption that the importer and the supplier were related persons. However, it was argued that the supplier holding 20% of the share capital of the importer did not necessarily establish a related person relationship as per Rule 2(2)(iv) of the Valuation Rules. The Tribunal referred to precedents and held that the conclusion of related person status was not tenable since no third person owned more than 5% of shares in both companies. The Tribunal allowed the importer's appeal, rejecting the Revenue's challenge on related person status. 2. The second issue revolves around the valuation of imported CNC tapping machines. The appellant declared the value at US $46,400 per machine, but the department loaded it to US $58,000 per machine citing Customs Valuation Rules. The appellant argued that due to Korean currency devaluation, the price was renegotiated and the revised value was accepted by their banker before fixing the invoice price. The Commissioner did not accept this argument, stating that no evidence proved the price reduction was due to currency depreciation. However, the Tribunal, based on correspondence and precedents, held that when currency fluctuation occurs, renegotiated prices should prevail. The Tribunal allowed the importer's appeal and rejected the Revenue's challenge on valuation. In conclusion, the Appellate Tribunal CESTAT, CHENNAI, in the cited judgment, addressed issues related to the determination of related persons under Customs Valuation Rules and the valuation of imported goods. The Tribunal provided detailed analysis, referring to legal precedents and relevant rules, ultimately allowing the importer's appeal and rejecting the Revenue's challenges on both issues.
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