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TMI Blog2018 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... Edge Bending Machine, CNC Machine Center. The appellant's firm was found to be related to their overseas supplier, namely, M/s. Biesse SPA, Italy. It was also found that 80% of the components' requirement was met from indigenous sources and that only 20% were being imported, that too from both related and unrelated suppliers. It also appeared that though the suppliers were manufacturers themselves, yet the overseas related suppliers used to procure the appellant's requirements from third party suppliers for export to the appellant's firm. Further, the related supplier had supplied the components to the appellants at or about the same price it was bought from the third party suppliers abroad. Transport charges were shown sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce' are added separately; (c) The impugned order has been passed mechanically without undertaking any investigation and, therefore, the imposition of 10% loading on all products without verifying the facts regarding import of 20% of raw material from M/s. Biesse SPA, Italy is unjustified; (d) In the context of provisions of section 14, Supreme Court in the case of M/s. Mirah Exports Pvt Ltd, Vs Commissioner of Customs reported in 1998 (98) E.L.T. 3 (S.C.) has held that in order to be termed as 'related person', there has to be mutuality of interest, where both sides should have interest in the business of each other; (e) It is held by Supreme Court in the case of Eicher Tractors Ltd., Vs Commissioner of Customs, Mumbai report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons' under the provisions of section 14 of Customs Act, 1962. In the instant case, neither the appellants have interest in the business of M/s. Biesse SPA, Italy nor M/s. Biesse SPA, Italy has any interest in the business of the appellants and, therefore, there is not even one side interest between the foreign supplier and the importer of goods i.e., appellants. 4. On the other hand, Ld. AR Shri B. Balamurugan supports the impugned order. 5. Heard both sides and gone through the facts. 6.1 In any transaction between foreign supplier and Indian buyer, the transaction value to be accepted as the basis for determining assessable value, the transaction should be at arms length. 6.2 Section 14(1) of the Customs Act, 1962 lays down that f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated in view of Rule 2(2) of the CVR, 1988, for the purpose of Customs Act, 1962. The foreign supplier has procured the goods from third party suppliers and sold the same to the appellants at more or less the same price and in addition to ocean freight. At the time of hearing, appellants have submitted a list of imports from their foreign principal to show that there is no deduction in the sale value viz., the purchase value of the principal. While this may be so, we are not able to fathom, how in such an international trade transaction, the freight cost incurred by the foreign supplier in procuring the goods within country of origin, or, for that matter, the margin of profit will not be added to local purchase cost to arrive at selling co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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