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TMI Blog2017 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier are related person accordingly the 20% enhancement was ordered. Aggrieved by the original order, the appellant filed appeal before the Commissioner (Appeals) which came to be rejected. Therefore the appellant is before us. 2. Shri Nikhil Rungta Ld. Counsel with Shri Karan, Advocate appearing on behalf of the appellant submits that the only ground for enhancement of 20% is the alleged relationship between the appellant and the foreign supplier. He submits that except the fact that foreign collaborator and the appellant companies have 50-50 percent share holding, there is no other evidence which shows that the value of the imported goods got influenced due to any other reason. He submits that merely because bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment relied upon by the Ld. Counsel merely because Foreign and Indian company having 50-50 percent equity in the Indian entity. It does not fall under the definition of related person as provided under Rule 2(2) of the Customs Valuation Rules, 1988. The relevant finding in the case of Modi Senator (I) Pvt. Ltd. (supra) is reproduced below: "8.4 Therefore, we hold that as per the definition of 'related person' under Section 14, there should be two-way interest between the buyer and the seller to disregard the transaction value. 9.1 In the present case, the German based company is no doubt a shareholder of the Indian company; they also have their nominees as Directors on the appellant company who is the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the German company and the appellant company. 9.4 We agree with the submission of the learned Advocate that mere holding of shares by one party with proportional nominee Directors in the other company is not amounting to relationship to disqualify the transaction price is settled by the Tribunal in the case of Collector of Customs, Bombay v. Maruti Udyog Ltd. - 1987 (28) E.L.T. 390. The relevant portion of the said order is reproduced below : "4. It is, no doubt, correct that Suzuki held 26% shares in Maruti and, for that reason, had a proportional representation on the Board of Directors of Maruti also. But Maruti had no share holding in Suzuki nor any representation on the Board of Directors of Suzuki. To rule out valuation under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. From the above, the following emerges : (a) The two way interest between the buyer and the seller is a must to disregard the transaction value both before 11-5-2002 and from 11-5-2002 to 10-10-2007. (b) The interest of the German company in the business of appellant company is established in view of its shareholding, presence of Directors and supply of technical know-how for manufacture of products by the appellant company. There is no evidence of interest of the appellant company in the business of the German company. (c) There is no third party controlling both the buyer and the seller. The buyer and the seller do not together control any third party. (d) As the relationship is not established there is no need to go into other iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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