2017 (1) TMI 1 - AT - Customs

Valuation - transaction value - related party transaction - Held that - After going through the record of the case including the orders passed by both the authorities below, we are convinced that the order passed by the original authority merits no interference, in the light of the distributor agreement between the respondent and the foreign supplier. In any case the original authority has provided sufficient safety measures in his order to secure interest of the Revenue. Accordingly, we find no reasons to interfere with the impugned order - transaction value accepted - appeal rejected - decided against Revenue.

Summary

Issues:
1. Challenge to the order in appeal dated 3.12.2014 passed by the Commissioner (Appeals) (Customs) New Delhi regarding the valuation of imported goods.
2. Allegation of a non-speaking order and lack of examination by the Adjudicating authority regarding the declared value approximating to the values referred to in Rule 3(3)(b) of the Valuation Rules 2007.

Analysis:
1. The Revenue filed an appeal challenging the Commissioner (Appeals) (Customs) New Delhi's order regarding the valuation of imported melamine tableware and kitchen ware. The department contended that the imports were from a related foreign supplier, triggering the Special Valuation Branch (SVB) to examine the valuation pattern. The original authority accepted the import value declared in the invoice, leading to the Revenue's appeal. However, the appellate tribunal upheld the valuation based on transaction value, dismissing the Revenue's dissatisfaction with the order.

2. The grounds for appeal included the assertion that the order-in-original was non-speaking and failed to provide reasons for accepting the transaction value. Additionally, it was argued that the Adjudicating authority did not assess whether the declared value approximated the values specified in Rule 3(3)(b) of the Valuation Rules 2007. The Commissioner (Appeals) addressed these grounds in the impugned order, emphasizing the importance of Rule 3(3)(a) which mandates examination of circumstances in transactions between related parties to ensure the price is not influenced by the relationship. The Respondents provided documents supporting the declared values, and the Revenue failed to present evidence to challenge the genuineness of these documents.

3. Regarding the applicability of Rule 3(3)(b), the tribunal explained that it provides an opportunity for the importer to demonstrate that the transaction value closely approximates a previously accepted test value. The Respondents, in this case, were unable to provide data on transaction values of identical or similar goods from other importers to prove the fairness of their declared invoice values. As a result, Rule 3(3)(b) was deemed not applicable, and the appeal filed by the Revenue was dismissed based on the inability to demonstrate the influence of the relationship between the buyer and seller on the declared values.

4. The tribunal, after reviewing the orders of both authorities, found no reason to interfere with the impugned order, citing the distributor agreement between the respondent and the foreign supplier as a key factor. The original authority's order was deemed sufficient to safeguard the Revenue's interests, leading to the rejection of the Revenue's appeal.