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2010 (3) TMI 307 - AT - CustomsValuation- Related person- The appellants wrote a letter to the Deputy Commissioner of Customs declaring that Nestle India and Nestle Brazil were related persons for the purpose of Customs Valuation Rules but the relationship between the buyer and seller had not influenced the price. The Deputy Commissioner (SVB) by his Order-in-Original dated 26-5-2001 rejected the appellant s request for assessment on the transaction value and determined the value for Customs purposes under Rule 8 of the Customs Valuation Rules holding that all imports by Nestle India from Nestle Brazil, Nestle France and Nestle Netherlands would be loaded by 20% for Customs duty assessment. Held that- the impugned order requires to be set aside and we order accordingly. Since the matter is very old and there is no other material on record which will enable application of an alternative method of valuation such as Computed Value Method or Deductive Value Method at such a distant point of time, we see no reason for ordering a further remand. Hence, we direct that the assessments may be made on the basis of declared value as a practical measure to resolve this decade old dispute. The appeal is allowed in the above terms.
Issues:
1. Valuation of imported goods under Customs Valuation Rules. 2. Determination of Customs value for assessment purposes. 3. Relationship between buyer and seller influencing price. 4. Applicability of Rule 4 of the Customs Valuation Rules. 5. Burden of proof on importers regarding relationship influence on price. Analysis: Valuation of Imported Goods under Customs Valuation Rules: The case involved Nestle India importing "Peel Off Ends" (POE) from Nestle Brazil, Nestle France, and Nestle Netherlands for use in their products. The Customs Valuation Rules were applied to determine the value of the imported goods for assessment purposes. Determination of Customs Value for Assessment Purposes: The Deputy Commissioner of Customs determined the value for Customs purposes under Rule 8 of the Customs Valuation Rules, adding 20% to all imports by Nestle India from the mentioned countries. This decision was challenged through appeals to higher authorities. Relationship Between Buyer and Seller Influencing Price: The issue of the relationship between Nestle India and the foreign sellers influencing the price of the imported goods was a crucial point of contention. The Customs authorities examined whether the relationship affected the price of the goods in question. Applicability of Rule 4 of the Customs Valuation Rules: Rule 4 of the Customs Valuation Rules, specifically sub-rule (3), was crucial in determining the acceptance of transaction value when the buyer and seller are related. The rule required that the relationship should not influence the price for the transaction value to be accepted. Burden of Proof on Importers Regarding Relationship Influence on Price: The Tribunal found that the burden of proof regarding the relationship not influencing the price rested on the importer. In this case, the appellants failed to provide substantial evidence to demonstrate that the relationship did not impact the price, leading to a decision in favor of the appellants based on the declared value as a practical resolution to the long-standing dispute. Overall, the Tribunal set aside the impugned order and directed assessments to be made on the basis of the declared value due to the lack of evidence regarding the relationship's influence on pricing. The judgment highlighted the importance of providing clear evidence to support claims under the Customs Valuation Rules and the burden of proof on importers in such cases.
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