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TMI Blog2012 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany, then both would be deemed to be related. There is no warrant in law to do so. As regards the question of dealing with the royalties, licence fee etc., there are adequate provisions in the Customs Valuation Rules [for example, Rule 9(1)(c)] to deal with the same. - It cannot also uphold arbitrary enhancement of value by 20% without there being any basis for it. - C/437/2001 - A/1314/2011 - Dated:- 7-12-2011 - Shri P.G. Chacko, Dr. Chittaranjan Satapathy, JJ. REPRESENTED BY : Shri A.B. Niranjan Babu, SDR, for the Appellant. Shri Alwan, Advocate, for the Respondent. [Order per : P. G. Chacko, Member (J)]. Heard both sides. 2. This appeal by the Commissioner of Customs relates to a case of Customs valuation initially adjudicated by the Deputy Commissioner of Customs in-charge of the Special Valuation Branch. His main finding is as under :- I have carefully gone through the documents submitted by the importer. From the above documents it could be concluded that M/s. Guanxi Penshibao Co. Ltd. China (Pvt.) Ltd., Bangalore is holding 35% share capital in the Indian importer company. Hence as per Rule 2(2) (iv) of the Customs Valuation Rules, 1988, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also stands disposed off. 6. The above order passed by the Tribunal was undoubtedly related to determination of a question having a relation to the value of goods for the purpose of assessment. Section 130E of the Customs Act, 1962 clearly states that an appeal shall lie to the Supreme Court from any order passed by the Tribunal relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. As such, appeal against the aforesaid order of the Tribunal lied to the Hon ble Supreme Court. Further, Section 130(1) of the Customs Act, 1962 provides an appeal to the High Court from an order in appeal by the Tribunal, not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment. 7. Yet, we find that the Commissioner of Customs filed an appeal to the Hon ble Madras High Court against the aforecited order of the Tribunal and that the Hon ble High Court has passed an order dated 17-6-2011 remanding the matter for fresh consideration. Accordingly, this appeal ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been established. He also says that the basis of loading of the value by 20% is arbitrary as no legal basis for the same has been indicated in the order of the original authority. He states that in the case of Modi Senator (supra), the Tribunal has specifically examined the provision under Rule 2(2)(iv) of the Customs Valuation Rules and has held that in the absence of any ownership of shares of 5% or more by the third party in both the buyer and the supplier, they cannot be held to be related. He also states that the civil appeal against the order of the Tribunal in Modi Senator (supra) has been dismissed by the Hon ble Supreme Court after condoning the delay vide Commissioner v. Modi Senator (I) Pvt. Ltd. - 2010 (256) E.L.T. A19 (S.C.). 10. We have considered submissions from both sides as well as the case records and the cited decisions. Customs valuation is a technical matter, nuances of which may not be easily comprehended by lay persons but senior customs officials and regular importers are expected to have a fair comprehension of the subject. Hence, when the Tribunal decides a dispute involving technical matters such as valuation and classification, we sometimes write a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have not made available the necessary documents. In the absence of the necessary documents, he has obviously done a slip shod job to determine the customs value on a very weak foundation. Further, we find that he has held the supplier and the respondents related in terms of Rule 2(2)(iv) of the Customs Valuation Rules. If the jurisdictional Commissioner was aggrieved by this finding he should have appealed against the order of the original authority. Since no departmental appeal was filed, the lower appellate authority had no option but only to consider existence of relationship in terms of Rule 2(2)(iv) or lack of it, which was appealed against by the respondents. He was not required to and could not have given a finding on relationship in terms of other provisions of Rule 2(2). Under the circumstances, the grounds of appeal filed by the Department before the Tribunal referring to the other provisions such as Rule 2(2)(i) and (v) are of no use as the Tribunal cannot find fault with the lower appellate authority s order on grounds not considered by the original authority and not raised before the lower appellate authority. 14. Rule 2(2)(iv) reads as follows :- (2) For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be related. There is no warrant in law to do so. There is also no argument advanced either in the grounds of appeal or by the learned SDR to convince us that the interpretation given by the original authority in this regard has any legs to stand upon. Hence, we are of the opinion that the order of the lower appellate authority holding that the supplier and the respondents are not related in terms of Rule 2(2)(iv) is not required to be interfered with by us. 16. We also find that the original authority has not held the supplier and the respondents to be related in terms of any of the other provisions of Rule 2(2) and further we find that the Department did not file any appeal against the order of the original authority. Hence, the conclusion drawn by the lower appellate authority that the supplier and the respondents are not related cannot be interfered with. 17. The question of examining whether the relationship has influenced the price and whether the price approximates any of the test values as provided under Rule 4(3) do not arise in the absence of relationship itself not being established. Such examination is envisaged only where relationship is first established. 18. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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