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Issues Involved:
1. Determination of the price at which the goods were ordinarily sold or offered for sale. 2. Whether the price paid by the appellants was the sole consideration for the sale. Detailed Analysis: Issue 1: Determination of the Price at Which the Goods Were Ordinarily Sold or Offered for Sale The appellants imported spare parts of TEREX Earth Moving Machinery under a Dealer Selling Agreement with M/s. General Motors Scotland Limited. The lower authorities enhanced their import invoice prices by 18%, arguing that other importers of TEREX Spare Parts in India had to pay an extra 18% as a buying commission to the appellants. The appellants contended that their invoice prices should be accepted as the assessable value under Section 14(l)(a) of the Customs Act, 1962. The appellants argued that they were a non-exclusive dealer and not an agent of General Motors. They cited M/s. Hindustan Motors, who imported TEREX parts directly from General Motors at the same invoice price. They also emphasized that the majority of imports (92%) were made by them, suggesting that their invoice price was the value ordinarily charged. The department's representative countered that the appellants were effectively the exclusive dealer for TEREX Spare Parts in India and Bhutan, except for M/s. Hindustan Motors. The department argued that the price paid by other buyers, which included the 18% buying commission, was the price ordinarily charged under Section 14(l)(a). Upon review, it was found that all other buyers had to place their indents through the appellants and pay the 18% commission. Thus, the lower price available only to the appellants could not be considered the price at which the goods were ordinarily sold or offered for sale. The nature of the transaction, rather than the relative quantity of goods sold, determined the price ordinarily charged. Issue 2: Whether the Price Paid by the Appellants Was the Sole Consideration for the Sale The appellants contended that their purchases from General Motors were at arm's length and that the transaction value represented by the import invoice should be accepted. They referenced the General Agreement on Tariffs and Trade (GATT) and Articles 37 and 51 of the Constitution of India, arguing that the transaction value concept should be applied. The department's representative argued that the appellants acted as agents or local representatives of General Motors. The Agreement required the appellants to aggressively develop the market for TEREX Parts and Products in India and Bhutan at their expense. In return, they were compensated by the 18% buying commission paid by other buyers. This arrangement indicated a mutuality of interest between General Motors and the appellants, and the invoice price was not the sole consideration for the sale. The tribunal concluded that the appellants' invoice price did not meet the test of Section 14(l)(a). The expenses on advertisement, publicity, and market promotion incurred by the appellants were part of the assessable value of the goods. The buying commission was not a post-importation charge but a part of the total import price paid by other buyers. The tribunal also noted that the GATT Valuation Rules were not applicable, as the current provision of Section 14(1)(a) was based on the concept of deemed value. Conclusion: The tribunal held that the lower authorities were correct in assessing the appellants' imports based on the higher price paid by other buyers, which included the 18% buying commission. The appeal was dismissed.
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