2008 (2) TMI 111 - AT - Customs

Enhancement of transaction value on basis of contemporaneous import - appellant is related to the foreign supplier & also their indenting agent assessee have not been able to explain satisfactorily the reason for the difference in price between supply made to them & another importer not proved that the price reduction was on genuine commercial considerations - enhancing the T.V. on basis of identical goods imported from the same supplier by the same ship, in same time appears reasonable

Summary

Issues:
- Appeal against Commissioner (Appeals) orders
- Common issue in two appeals regarding valuation of imported goods
- Relationship between the importer and foreign supplier influencing price
- Comparison of transaction values with another importer
- Appellant's claim of entitlement to lower price on commercial grounds
- Mumbai Customs' decision on transaction value
- Appellant's failure to prove price reduction due to genuine commercial considerations
- Decision on enhancing the value of imported consignments

Analysis:
The judgment involves two appeals against Commissioner (Appeals) orders, dealing with a common issue of valuation of imported goods. The appellant, a subsidiary of a US-based company, imported consignments of Polyether Polyol-Voranol-3010. The Mumbai Customs, after examining relevant documents, concluded that the importer did not pay any extra amount influencing the import price. The appellant declared values for two consignments, which were enhanced by the Original Authority based on similar imports by another importer at a higher value. The appellant argued for a lower price due to commercial considerations and the lack of mutuality of interest with the supplier. However, the authorities upheld the valuation enhancement.

The Mumbai Customs' decision, based on importer statements and documents, allowed acceptance of the declared value. The appellant's relationship with the foreign supplier raised concerns about price influence, requiring the appellant to prove genuine commercial reasons for lower prices. Despite the appellant's explanations, the authorities found the valuation enhancement justified, considering the comparable imports and lack of evidence supporting price reduction on valid commercial grounds.

The judgment emphasizes the burden on the appellant to demonstrate that price differences were not due to the relationship with the supplier. While acknowledging market fluctuations, the court upheld the authorities' decision to enhance the consignment values based on similar imports from the same supplier. Ultimately, the appeals were rejected, affirming the valuation enhancement decisions by the authorities.

This detailed analysis highlights the key legal and factual aspects of the judgment, focusing on the valuation issues, relationship influence on prices, and the burden of proof on the appellant regarding commercial considerations for import pricing.