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TMI Blog1994 (12) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... m acting as a distributor of the products of the above named Principals the appellant also imports from the aforesaid principals assembly of diesel engines and spare parts for diesel engines and transmission assemblies, which are used in earth moving, mining and irrigation machinery. In case of imports of the above-mentioned goods, by other parties, the appellant acts as an indenting agent of the aforesaid Principals and receives commission of 6% of the invoiced amounts in respect of sales to other parties. In case of imports by the appellants themselves the invoiced price is reduced by the suppliers to the extent of the commission payable as per agreement of distributorship with the appellants. Before the introduction of the Customs Valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principals of the appellant. He also observed that both the seller and the buyer have interest in the business of each other since both are commercially engaged in selling the goods supplied by the principals. Both of them are interested in selling the goods in India and that being the business of Principals the appellants are definitely interested in the business of their principles and vice versa. Accordingly, he held that the price quoted to the appellants by their principals is not a price for which the same goods are sold ordinarily in India. Not being satisfied with the order passed by the Collector (Appeals), the appellants have come before us by way of this appeal. 2. Shri A.N. Haksar, learned Senior Advocate, appearing for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of customs duty. He contended that Rules of Valuation Rules to be applied in sequence in determining the assessable value and, accordingly, applying the Rule 4 of the Valuation Rules, transaction value is the price actually paid or payable for goods and in this case there was no reason to reject the invoice value as transaction was at arm s length. Commission is not the part of the price and mere fact that he acted as an Indenting Agent in case of imports made by third parties and commission received on such transactions cannot be added to the invoice of independent imports made by him since price is the sole consideration. It cannot be said that there is a mutuality of interest in the business of each other to treat the appellant as a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed therein and same reasoning was followed by the Calcutta Custom House. He said that goods were loaded with addition of 6.3% in view of the relationship between the parties and concept of related person was not in dispute prior to new Valuation Rules and since same relationship continues, the Department was justified in determining the assessable value on the same line even with reference to new Valuation Rules. He stated that General terms and conditions of Distributor s agreement, Sale Bulletin offers confirm that this concession was given to the party for the services rendered by him in promoting sales in India and because of that relationship, the special consideration or special price offered to him was not the normal price in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y considered the pleas advanced on both sides. There is some force in the arguments advanced on behalf of the appellants that appellant is not a related person as defined in Rule 2(2) of the Valuation Rules. The mere fact that appellant is selling the goods in India as a distributor will not make him as related person since mere distributor is not a related person as it was rightly argued by Shri Haksar. It cannot be said that there was mutuality of interest in the business of each other on the ground that both of them are interested in selling the goods in India. But important point to be considered in this case is whether price offered to the appellants in respect of the goods purchased by them from their suppliers was a special price or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants were, in fact, the sole distributor appointed by their Principals in India since no other person was appointed as distributor. There was no one else given the privilege of importing the goods at the same price as paid by the appellants. All other buyers had to place their indents on suppliers through the appellants only and the price paid by those all others was increased by some percentage 6% to 10% as the case may be depending on the nature of goods which the appellants added as their buying commission. When every other importer of the goods in question had to pay 6% or 10% higher price, the lower price available to the appellants alone could not be said to be the price at which the goods are ordinarily sold or offered for sale. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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