2018 (2) TMI 1065 - AT - Customs

Valuation - related party transaction - loading of invoice value - adjudicating authority took the view that this profit margin was extremely low in comparison to the profit margin recorded by Apple, Ireland - Held that - there is absolutely no justification to load the value of goods imported from Singapore on the basis of the profit margin of the Ireland unit. The transaction value between the foreign supplier and the respondent has been consistently accepted by the SVB and has been periodically renewed - transaction value must be accepted - appeal dismissed - decided against Revenue.

Summary

Issues:
- Dispute over loading of imports value based on profit margin
- Acceptance of transaction value between foreign supplier and respondent

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal, challenging the loading of imports value as per the Order-in-Original. The respondent imported goods bearing the 'Apple' brand name from a related supplier in Singapore. The original adjudicating authority had ordered loading of imports based on specific percentages for different items like I-Phones, I-Pad Mini, I-Pod Classic, and other items. However, the Commissioner(Appeals) accepted the invoice value of the transactions and set aside the loading order, leading to the Revenue filing the present appeal and a stay application due to the recurring nature of imports.

2. The Tribunal considered the history of investigations by the Special Valuation Branch (SVB) regarding the respondent's imports. Previous orders had accepted the invoice values, including imports from Apple Sales International, Ireland. The current dispute arose during the renewal proceeding for the SVB order concerning imports from the related supplier in Singapore. The original authority ordered loading based on the high profit margin of goods supplied from Apple Sales International, Ireland, compared to the profit margin of the Singapore company supplying to the respondent.

3. The impugned order by the Commissioner(Appeals) was based on the lack of justification for loading the value of goods imported from Singapore based on the profit margin of the Ireland unit. The Commissioner emphasized the consistent acceptance of transaction values by the SVB and periodic renewals. The Tribunal, after hearing both sides and reviewing the records, found no justification for attributing the profit margin of the Ireland unit to the goods imported from the Singapore unit.

4. Consequently, the Tribunal upheld the impugned order, dismissing the Revenue's appeal and the stay application. The decision was based on the lack of rationale for loading the profit margin from the Ireland unit onto the goods imported from the Singapore unit. The transaction value between the foreign supplier and the respondent was deemed acceptable, in line with past SVB renewals and consistent practice.

In conclusion, the judgment resolved the dispute over loading the imports value based on profit margin, affirming the acceptance of transaction value between the foreign supplier and the respondent.