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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 ..... It does not fall under the definition of related person as provided under Rule 2(2) of the Customs Valuation Rules, 1988. In the absence of any other evidence it is not established that the appellant and foreign collaborator are related person. Therefore the impugned order is not sustainable - appeal allowed - decided in favor of appellant. - C/946/05 - A/94265/16/CB - Dated:- 6-12-2016 - Shri Ramesh Nair, Member (Judicial) and Shri Raju, Member (Technical) Shri Nikhil Rungta, Advocate with Shri Karan, Advocate, for Appellant Shri M.K. Mall, Assistant Commissioner (A.R) for respondent ORDER The adjudicating authority vide Order-in-Original No. S/9042/GATT/97GVC dt. 27.6.2000 enhanced the value by 20% over and abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that due to undisputed fact that the foreign collaborator is holding 50% equity in the appellants company, there is a direct control of the foreign company and the appellant company. Therefore in terms of Rule 2(2) of Customs Valuation Rules, 1988 both are related persons, therefore both the lower authorities have rightly held 20% enhancement on the declared value. 4. We have carefully considered the submissions made by both the sides, we find that the sole basis for enhancement of 20% over and above the declared invoice value is that foreign collaborator is holding 50% equity in the appellants company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the Indian company, we hold that the German company is not legally or operationally in a position to exercise restraint or direction over the appellant as required in the interpretative Notes. 9.2 As per the definition of related person under Section 14, there should be two-way interest to disregard the transaction value. We are of the view that such two-way interest has not been established. The plea taken that the Indian company wants German supplier to grow so that the cost of the imports will be reduced is a general interest between any buyer and seller. Therefore, we hold that the appellant and the German company are not related and therefore, the transaction value cannot be disregarded on this ground. 9.3 The German c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re models and their components. We do not agree with the department s plea. The transfer of technical know how from Suzuki to Maruti is a separate commercial transaction governed by the Licence Agreement and Suzuki charges a price for it. That does not create an interest of Maruti in the business of Suzuki, Japan. The above decision of the Tribunal has been upheld by the Supreme Court in the decision reported in 1989 (41) E.L.T. A61. 9.5 Similarly, we also agree with the submission that Rule 2(2)(iv) of the Valuation Rules are not applicable in the absence of any ownership of shares of 5% or more by third party in both the buyer and the supplier as upheld by the Tribunal in the cases of Barbour Vardhaman Thread Ltd. v. Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 14 ibid there should be two way interest between the buyer and seller to disregard the transaction value and one way interest between buyer and seller is insufficient as the statutory requirement of buyer and seller having no interest in the business of each other, does not imply that neither buyer has interest in the business of seller nor the seller has interest in the business of the buyer. The Tribunal also observed that mere holding of shares by one party with proportional nominee directors in the other company does not amount to a relationship to disqualify transactional value and in the absence of ownership of share of 5% or more by the third party in both the companies i.e., the buyer and the seller, Rule 2(2) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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