2017 (2) TMI 1157 - AT - Customs

Valuation of imported item - ladies shoes, men s shoes, bags etc - related party transaction - whether the importer and the Foreign Supplier are related persons in terms of Rule 2(2) of the Valuation Rules 2007, and whether the transaction is influenced by the relationship? - Held that - looking into the agreement between the appellant and the related foreign supplier, original adjudicating authority, came to the conclusion that the transaction value may be accepted. He has also given reasons for such conclusion - appeal was filed before Commissioner (Appeals), who, was of the the original authority should call for additional information/data/document from the importer and remanded the matter to the original authority for passing denovo orders - matter allowed by way of remand.

Summary

Issues:
1. Valuation of imports from a related foreign supplier.
2. Legality and propriety of the original order.
3. Consideration of agreement clause for transaction value adjustment.
4. Review by the Revenue and remand to original adjudicating authority.

Issue 1: Valuation of imports from a related foreign supplier
The appeal pertains to the valuation of imports by an importer from a related foreign supplier. The Special Valuation Branch, Delhi, determined that the importer and the foreign supplier are related persons under the Customs Valuation Rules, 2007. However, it was found that the relationship did not influence the invoice values of the imported goods. The order directed acceptance of the declared invoice values as transaction value subject to scrutiny and possible additions under the relevant rules.

Issue 2: Legality and propriety of the original order
The Commissioner reviewed the original order and found it lacking in legal reasoning and proper assessment. The review order highlighted that the Deputy Commissioner (SVB) accepted the declared value without providing reasons or examining if the relationship influenced the prices. The Commissioner emphasized the necessity of findings on the declared value's approximation to specified values under the Valuation Rules. The original order was deemed non-speaking and legally insufficient, leading to a direction for appeal filing.

Issue 3: Consideration of agreement clause for transaction value adjustment
During the proceedings, the Revenue argued that the original authority did not adequately consider a clause in the agreement between the importer and the foreign supplier. This clause allowed adjustments to transaction values through credit and debit notes post-import to prevent undue loss to the importer. The Revenue stressed the significance of this clause and the need for its examination, advocating for remand to the original adjudicating authority for a thorough review.

Issue 4: Review by the Revenue and remand to original adjudicating authority
After hearing arguments from both sides, the Tribunal acknowledged the original authority's conclusion on accepting the transaction value based on the agreement with the foreign supplier. However, considering the Revenue's review and the Commissioner's observations, the Tribunal decided to remand the issue back to the original authority for a fresh decision. The Tribunal allowed the admission of additional evidence and directed the case to be finalized within two months, ensuring a fair opportunity for the appellant to present their perspective.

In conclusion, the appeal was disposed of by way of remand, emphasizing the need for a comprehensive reassessment by the original adjudicating authority in line with the legal provisions and observations made during the review process.