2013 (9) TMI 619 - AT - Customs

Valuation of goods - transaction with related parties - Held that - There was no reason to reject the transaction value declared by the assesses - there was no evidence led by the department to show that the transaction value declared by the appellant had been influenced by the relationship between the foreign supplier and the appellant importer - evidences available on record show that the prices declared are comparable with prices of similar supplies made to importers in other countries relied upon CC, New Delhi Vs. Prodelin India (P) Ltd. (2006 (8) TMI 186 - SUPREME COURT OF INDIA) - merely because the importer and the foreign supplier are related persons, the transaction value cannot be rejected and the onus to prove that the declared price did not reflect true transaction value was always on the department and in the absence of any evidence that identical or similar goods imported by other importers are at higher price - the department was bound to accept the transaction value decided in favour of assessee.

Summary

Issues:
1. Appeal against order-in-appeal No. 430/MCH/AC/SVB/2012 dated 29/05/2012.
2. Valuation of imported conveyor belts and accessories from related foreign suppliers.
3. Influence of technical assistance, trade mark, and royalty agreement on transaction value.
4. Comparison of prices with similar goods supplied to other countries.
5. Application of the decision in CC, New Delhi Vs. Prodelin India (P) Ltd.

Issue 1:
The appeal challenges the order-in-appeal No. 430/MCH/AC/SVB/2012 dated 29/05/2012 passed by the Commissioner of Customs (Appeals) Mumbai-I.

Issue 2:
M/s. Sempertrans Nirlon Pvt. Ltd. imported conveyor belts and accessories from related foreign suppliers, leading to a dispute over the valuation of these imports.

Issue 3:
The presence of a technical assistance, trade mark, and royalty agreement between the appellant and their foreign principal raised concerns about the influence of these agreements on the transaction value of the imported goods.

Issue 4:
The assessing authority compared the prices of the imported goods with similar supplies to buyers in other countries like Pakistan, Chile, and Argentina, leading to a decision on the acceptance of the transaction value.

Issue 5:
The appellant's argument, supported by the decision in CC, New Delhi Vs. Prodelin India (P) Ltd., focused on the independence of the royalty payments for technical know-how from the import transactions and the comparability of prices with goods supplied to importers in other countries.

The Tribunal analyzed the technical assistance, trade mark, and royalty agreement between the appellant and their foreign principal, emphasizing that the royalty payments were for the transfer of technical know-how for the conveyor belts manufactured in India. This agreement was deemed independent of the import transactions from the associated company in France. The Tribunal noted the absence of evidence showing that the declared transaction value was influenced by the relationship between the foreign supplier and the appellant importer. The decision in CC, New Delhi Vs. Prodelin India (P) Ltd. was cited to highlight that the burden of proving the declared price did not reflect the true value rested on the department. Since no evidence was presented to demonstrate that identical or similar goods imported by others were priced higher, the Tribunal upheld the transaction value declared by the appellants, ultimately setting aside the impugned order and restoring the lower assessing authority's decision.

In conclusion, the appeal was allowed based on the Tribunal's findings that the technical assistance and royalty agreement did not impact the transaction value of the imported goods, as evidenced by the comparability of prices with similar supplies to importers in other countries.