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TMI Blog2014 (10) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ade from April 2006 to April 2008 is justified. Loading of profit margin - Held that:- As regards loading of 10% profit in the invoice price, on perusal of records and the findings of the adjudicating authority, we find that the lower authority has not brought out any reasons for arriving the quantum at 10% towards profit margin. - although there is no dispute on the fact that both the supplier and the appellants are related persons in terms of Rule 2 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, M/s.Google Inc. USA are not selling the goods and buying for trading purpose but being a principal company of the appellant, they have procured the goods on the global basis for supply to their own affiliated group companies located across the world. In terms of the Valuation Rules, notional profit element shall be added to the invoice price for arriving at the transaction value - the loading of 10% profit margin on the invoice value appears to be on the higher side. - since the appellant is a STPA unit and also taking into the fact that the imports made by the appellant from the supplier i.e. Google Inc. is only for the purpose of development of soft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Determination of Value of Imported Goods) Rules 2007, rejected the declared invoice price and ordered for loading price by 20% and 41.125% if the invoice is CIF or FOB basis respectively. Aggrieved by this SVB order passed by the adjudicating authority, the appellant preferred appeal and the Commissioner (Appeals) vide impugned Order dt. 28.6.2012 upheld the Lower Authority's order loading of invoice value and rejected their appeal. Hence the present appeal. 3. Heard both sides. 4. The Ld. Advocate for the appellants submits that M/s.Google Inc., USA entered into global purchase agreements with various vendors for supply of computers, laptops etc. for meeting their demands within their group companies. They procure and supply to their affiliated companies operated in different countries as per their requirements. M/s.Google Inc. USA is not doing any commercial purchase and sale for making profit and the supplies made is only to their internal consumption by the group companies. He also submits that the group companies also procure the items from vendors directly at the same price as per the agreement entered into by the M/s.Google Inc. USA. He submits that the lower aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A.R reiterates the finding of the adjudicating authority and the lower appellate authority. He submits that the appellants are related person as all the imports are made from the group company. The invoice price is not represented as true transaction value. Therefore, valuation was determined under Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. He submits that the group company supplied the goods to the appellant at the same price at which they have procured from their vendors and termed as CIF price without adding of the overhead towards, storage, testing, packing, transportation etc. Therefore, the appellate authority has rightly upheld the order of the adjudicating authority for loading the invoice price. 7. We have carefully considered the submissions of both sides and also examined the records. We find that the adjudicating authority has held that both the supplier and the appellants are related in terms of Rule 2 (2) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 and examined their relationship and accordingly ordered for loading of 41.125% on the invoice price for all the imports made from 2006 to 2008 on various h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heads twice. 10. Further, we find that in certain cases, the percentage of overheads as computed above is more than 10% and upto a maximum of 38%. In few cases, it is 5% to 7% and majority of the cases the percentage is more than 10%. In view of the above facts that the supplier has already built in the overheads cost in the invoice price, we hold that loading of additional 10% under 'overheads' as determined by the lower authority is not justified in so far as the imports effected after April 2008 and therefore liable to be set aside to that extent. 11. For the shipments made from April 2006 to April 2008, the appellants have admitted that their supplier has not made any addition of overheads in the invoice price. As seen from the records, we find that the supplier has quoted the procurement price from their vendors same as CIF price in the invoices raised to the appellants. Therefore, in terms of Valuation Rules, for determining the correct transaction value of the goods supplied by the related person, addition of overheads and other charges are essential to arrive at the transaction value. The lower authority by taking into various factors has ordered for loading o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that both the supplier and the appellants are related persons in terms of Rule 2 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, M/s.Google Inc. USA are not selling the goods and buying for trading purpose but being a principal company of the appellant, they have procured the goods on the global basis for supply to their own affiliated group companies located across the world. 13. We find from the record that M/s. Google Inc. USA supplied to the appellant the following items :- (1) Networking equipment, such as servers, switches, ports Wi-fi items. (2) IT equipments i.e. Logistics, monitors, CPUs etc. (3) Video Conferencing Equipments (4) Telematic equipments and (5) Furniture and fixtures, security cameras etc. These goods are procured by the supplier from various sources and centralized at USA and resupplied to their affiliated companies including the appellant as per the specific requirement. It is not the case of the Revenue that M/s.Google Inc. USA supplied these goods to any third parties other than their own affiliated companies at higher price. Therefore, it is evident that in order to maintain the standard and quality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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