2014 (12) TMI 108 - AT - Customs

Valuation of goods - Enhancement of valuation - Held that - Foreign supply is having uniform policy wherein the buyers from their foreign supplier are getting some rate of discount and we have inspected the invoice issued to Brazil and Italy where some rate of discount of 65% given on the price list. Further in precedent case where foreign supplier was having holding 35% of the equity are also getting 65% discount clearing policy on list price and the same has been accepted by the Revenue. Therefore we hold that in this case the transaction value declared by the appellant is not influenced being related person and the transaction value is the correct assessable value. - Decided in favour of assessee.

Summary

Issues:
Whether the transaction value declared by the appellant for the import consignment was rejected due to being related persons.

Analysis:
The appellant, a 100% subsidiary of a German company, had declared a transaction value for an import consignment, which was rejected as they were considered related persons. The Special Valuation Branch found that the declared value was influenced due to the relationship, resulting in a 185% increase. The Commissioner (Appeals) upheld this decision. The appellant challenged this order before the tribunal.

The appellant argued that despite being related, the price was not influenced as the foreign supplier had a uniform pricing pattern, offering a 65% discount. They presented evidence to support this claim, including invoices, agreements, and pricing policies submitted to tax authorities. They also highlighted a similar case where a 35% holding by the foreign supplier did not affect pricing. The appellant contended that the declared value should be accepted.

On the other hand, the Revenue contended that the appellant failed to produce evidence from the similar case before the lower authorities, questioning the validity of the argument. They maintained that no discount should be given due to the related-party status, supporting the initial decision to reject the declared value.

After considering both sides, the tribunal found that the foreign supplier had a consistent discount policy for buyers, evidenced by invoices to other countries. They noted a case with a 35% holding where a similar discount was accepted. Consequently, the tribunal held that the declared transaction value was not influenced by the related-party status and was the correct assessable value. The impugned order was set aside, and the appeal was allowed, granting both stay and appeal in favor of the appellant.