9911796707
TMI Blog1986 (11) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... rts in India had to pay that much amount extra by way of buying commission to the appellants. The appellants are aggrieved by the lower orders and pray that their invoice prices should be accepted as assessable value under Section 14(l)(a) of the Customs Act, 1962. 2. During the hearing before us, the appellants pressed for the following arguments :- (1) The Agreement made it clear that the appellants were a nonexclusive dealer in the area comprising Union of India including the States of Sikkim and Bhutan and M/s. General Motors reserved the right to sell TEREX Spare Parts to anybody else also in India. They cited the instance of M/s. Hindustan Motors who were importing TEREX parts directly from M/s. General Motors at the same invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India in Indian rupees and was, therefore, a post-importation charge, which could not be added to the assessable value of the goods as at the time and place of importation. They asserted that no part of the buying commission of 18% flowed back to the foreign supplier, i.e., M/s. General Motors. They contended that while the department could add the buying commission to the assessable value of imports made by others since they in fact incurred it, there was no justification to add it to the invoice price of the appellants when they did not incur it. (5) Since their purchases from General Motors were at arm s length, the transaction value as represented by the import invoice should be accepted. This was in accordance with the General Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or overriding commission. Thus, argued the learned representative of the department, there was mutuality of interest between the two. The interest of M/s. General Motors was that they got aggressive development of their market in India and Bhutan. The appellants interest was the 18% commission which they got from other importers. This happened because General Motors did not, in fact, deal with others in India. Every buyer in India and Bhutan had practically no option but to approach General Motors through the appellants and in the process the other buyer had to pay 18% more for importing the same goods into India. Relying on the Calcutta High Court judgment in the case of Bird Company [ILR - (1976) - 2 Calcutta 202], the learned repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such, it is the construction of this section as well as appellants Agreement with M/s. General Motors that would decide the point at issue. While the appellants contend that the lower price paid by them meets all the tests of the section, the case of the department is that it does not and that it is the higher price (after adding the buying commission of 18%) paid by the other buyers which satisfies the conditions of the section. Let us have a look at the section. It reads as under :- Valuation of goods for purposes of assessment - (1) For the purposes of the Indian Tariff Act, 1934 (32 of 1934), or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of new machinery and whose case was, therefore, a category apart, so far as the import of the parts as spare parts for servicing of the machinery in use is concerned, the appellants were in fact the exclusive dealer appointed by General Motors for the whole of India and Bhutan. There was no one else given the privilege of importing TEREX Spare Parts at the same price as paid by the appellants. The position in reality, as admitted before us by the appellants, was that all other buyers of Spare Parts had to place their indents on General Motors through the appellants only and the price paid by those all others was increased by 18% when the appellants added that much amount as their buying commission. In a nutshell, the actual p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case, it cannot be said that the invoice price of the appellants was the sole consideration for the sale; in addition to this price, the appellants were to incur expenses on advertisement, publicity and market promotion of M/s. General Motors products. The set up was such that a sort of mutuality of interest developed between M/s. General Motors and the appellants. The former got its market promoted and developed in India and Bhutan without paying for it, the latter got the expenses back by way of the buying commission which all other buyers of Spare Parts were obliged to pay. It may be that no part of the buying Commission flowed back to M/s. General Motors in cash but the flow back in kind was certainly the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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