2015 (3) TMI 469 - AT - Customs

Valuation of goods - Related person - on the basis of the agreement between the parties the Adjudicating Authority arrived at the decision that 10% of valuation is required to be loaded in the declared transaction value - Held that - As per Article 4(3) of the Agreement, it is stated that if there are third party imports, then the invoice valuation should be the price charges in the price list plus 10%. It is also accepted that the appellant are importing at the price declared in the price list. On examination of the condition of Article 4 (3) of the Distributorship Agreement it is clearly mentioned that in third party transaction, the valuation of the imported good shall be 100%. In other words, the appellants are importing the said goods being a related person as per price shown in the price list. Therefore, it is held that the transaction value is influenced being related person. Accordingly, we hold that the adjudicating authority has rightly loaded the value 10% on the transaction value. Therefore, we do not find any infirmity with the impugned order; the same is upheld. - Decided against assessee.

Summary

Issues: Valuation of imported goods, Related party transaction, Correctness of loading 10% on transaction value

Valuation of Imported Goods:
The appellant imported various items from foreign suppliers and was found to be a related person to the suppliers. The matter was referred for valuation, and the Adjudicating Authority decided to load 10% on the declared transaction value based on the agreement between the parties. The appellant challenged this decision before the Commissioner (Appeals) who upheld the Adjudicating Authority's order. The appellant argued that the loading was incorrect and that the declared transaction value should be accepted.

Related Party Transaction:
The appellant, being a related person to the foreign supplier, was subject to scrutiny regarding the influence of the relationship on the price of the imported goods. The Distributorship Agreement mentioned that in third-party transactions, the valuation of the imported goods should be 100%. The Tribunal found that the transaction value was indeed influenced due to the related party status of the appellant, as they were importing goods at the price declared in the price list. Consequently, the loading of 10% on the transaction value was deemed appropriate.

Correctness of Loading 10% on Transaction Value:
In analyzing the agreement terms, the Tribunal referred to Article 4(3) which stated that in third-party imports, the invoice valuation should be the price charges in the price list plus 10%. Since the appellants were importing at the price declared in the price list as a related person, the Tribunal concluded that the loading of 10% on the transaction value was justified. The Tribunal upheld the decision of the Adjudicating Authority and dismissed the appeal filed by the appellant.

This judgment primarily dealt with the valuation of imported goods in a related party transaction context. The Tribunal examined the terms of the agreement between the parties and concluded that the loading of 10% on the transaction value was appropriate due to the influence of the related party status on the pricing. The Tribunal found that the Adjudicating Authority's decision was correct in light of the agreement provisions and upheld the loading of 10% on the declared transaction value. The appeal filed by the appellant was dismissed, affirming the impugned order.