2017 (2) TMI 964 - AT - Customs

Valuation - enhancement of the value of the goods imported by the respondent from M/s Haeusler, Switzerland - related party transaction - Held that - department has not controverted the factual matrix, adducing any evidence in support of their claim - It is seen from the grounds of appeal that the case of the Revenue is that the amendment to agreement through the meeting have been created and presented before the Commissioner (Appeals), is a mere presumption and not supported by any evidence. US 85,000 paid for erection and commissioning which is post importation activity, the first appellate authority correctly recorded is not includible in the assessable value of imported goods. Appeal dismissed - decided against Revenue.

Summary

Issues involved:
- Enhancement of the value of imported goods
- Interpretation of agreement terms
- Relationship between importer and supplier
- Inclusion of post-importation charges in the value of goods

Enhancement of the value of imported goods:
The issue in this case revolves around the enhancement of the value of goods imported by the respondent from a supplier in Switzerland. The adjudicating authority found the respondent and the supplier to be related due to the supplier holding equity in the respondent company. The declared price was rejected, and the price was loaded accordingly. The first appellate authority allowed the appeal, setting aside the Order-in-Original based on the amendment to the payment schedule agreement. The appellate tribunal upheld the first appellate authority's decision, emphasizing that the lower authority failed to consider the amendment adequately, leading to an incorrect loading of the price.

Interpretation of agreement terms:
The Department contested the impugned order, arguing that the minutes of the meeting amending the agreement were not formal amendments and were presented after the Order-in-Original was passed. The Department claimed that the US $85,000 for erection and commissioning charges should be included in the assessable value of the imported goods. However, the tribunal found that the first appellate authority's reasoning, which excluded the US $85,000 as post-importation activity charges, was correct. The tribunal noted that the Department did not provide evidence to support its claims, and the amendment through the meeting was presumed without substantiation.

Relationship between importer and supplier:
The Department raised concerns about the relationship between the importer and supplier, suggesting that fabricated documents were created to protect their interests. However, the tribunal found that there was no evidence to support this claim and that the first appellate authority's decision was based on a thorough review of the case record. The tribunal upheld the decision that the relationship between the parties did not influence the invoice value.

Inclusion of post-importation charges in the value of goods:
Regarding the US $85,000 for erection and commissioning charges, the tribunal concurred with the first appellate authority that these charges, being post-importation activities, should not be included in the assessable value of the imported goods. The tribunal found that the first appellate authority's decision to set aside the Order-in-Original was correct and legally sound, without any infirmity. Consequently, the appeal by the Department was rejected.