2016 (11) TMI 988 - AT - Customs

Valuation - related party transaction - import of parts of switches - Held that - We find that in arriving at the conclusion that the invoice value has not been influenced by the relationship of the appellant with its foreign supplier. In the order dated 15.03.2013, it has been held that the foreign supplier does not supply the same goods to any other buyer in India / other countries; that the goods were supplied pursuant to the conditions prescribed in the purchase orders; that the supplier of goods has included the profit element in the cost of the goods supplied to the appellants; that contemporaneous import of similar/identical goods were not available in the NIDB Data. On verification of the documents submitted by the appellant, since the Dy. Commissioner of Customs, SVB concluded that the relationship did not influence the price and in absence of availability of contemporaneous import of similar /identical goods in the NIDB Data for the relevant period, we are of the view that the said order is in conformity with the Customs Valuation Rules. Therefore, there was no requirement for remanding the matter to the Original Authority for re-looking into the provisions of Rule 3 (3) (b) of the Valuation Rules for ascertaining the valuation of the subject import. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Import of parts of switches from a related person, valuation of imports under Customs Valuation Rules, remand by Commissioner (Appeals) for consideration of Rule 3 (3) (a) and (b) of the Valuation Rules.

Analysis:
The appeal was against an order by the Commissioner of Customs (Appeals) regarding the valuation of imported parts of switches from a related person. The appellant imported parts from a related person, and the case was referred to the Special Valuation Branch (SVB) for valuation. The Dy. Commissioner of Customs, SVB accepted the invoice value as transaction value under Rule 3 (3) (a) of the Customs Valuation Rules, stating that the relationship did not influence the price. The Revenue appealed the decision, leading to a remand by the Commissioner (Appeals) for consideration of Rule 3 (3) (a) and (b) of the Valuation Rules.

The appellant argued that the Dy. Commissioner's conclusion was in line with Rule 3 (3) (a) as the foreign supplier did not supply the same goods to any other buyer and included profit in the goods supplied. The Revenue supported the findings in the impugned order and the remand for satisfying the requirements of Rule 3 (3) (b). Upon hearing both sides, the Tribunal noted the Dy. Commissioner's findings that the relationship did not influence the price, as evidenced by various submissions and declarations from the foreign supplier.

The Tribunal found that the Dy. Commissioner's order was in conformity with the Customs Valuation Rules, as the relationship did not influence the price, and contemporaneous import data was not available. Therefore, there was no need to remand the matter for reevaluation under Rule 3 (3) (b) of the Valuation Rules. Consequently, the Tribunal did not find merit in the impugned order and allowed the appeal in favor of the appellant.

In conclusion, the Tribunal set aside the impugned order and ruled in favor of the appellant, finding that the valuation of the imported goods was in compliance with the Customs Valuation Rules, and there was no need for further consideration under Rule 3 (3) (b) of the Valuation Rules.