1991 (2) TMI 251 - AT - Central Excise

Summary

Issues:
1. Loading of values for imports due to buying commission.
2. Interpretation of relationship between parties affecting assessable value.
3. Claim of limitation under Section 28 of the Customs Act.

Analysis:
1. The appeal concerned the loading of values for imports from a UK supplier due to a buying commission. The Assistant Collector of Customs had decided to load 2-1/2% buying commission to the invoice value for assessment of duty and debit to the import license. The Collector of Customs (Appeals) upheld this decision based on the relationship between the parties and the services provided by the supplier. The appellants contested this decision, claiming the UK supplier issued sales invoices for outright sale and purchase, not acting as a buying house. However, the Tribunal found the loading of 2-1/2% on the invoice value justified due to the mutual interest in each other's business and the past practice of charging a buying commission.

2. The interpretation of the relationship between the parties was crucial in determining the assessable value under Section 14(1) of the Customs Act. The Collector of Customs (Appeals) concluded that the presumption of parties being interested in each other's business justified loading the invoice price by the amount of buying commission. The Tribunal agreed, emphasizing the mutual interest shown by the UK supplier's shareholding in the appellants' equity capital. The absence of original invoices from manufacturers hindered verifying the claim that the price charged included service charges, reinforcing the decision to load the value based on past practices and relationships.

3. The appellants also raised a plea of limitation under Section 28 of the Customs Act, arguing that the proceedings before the Assistant Collector were time-barred. However, the Tribunal noted that the decision to make provisional assessment was communicated in advance, and once the final decision to load the value was made, the provisional assessment was withdrawn. Therefore, the plea of limitation was rejected, and the appeal failed on this ground as well. The Tribunal upheld the decision to load the value and dismissed the appeal.

In conclusion, the Tribunal affirmed the loading of 2-1/2% on the invoice value for imports from the UK supplier, considering the relationship between the parties and the past practice of charging a buying commission. The interpretation of mutual interest and the rejection of the limitation plea under Section 28 supported the decision to uphold the assessment by the lower authorities.