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TMI Blog2019 (9) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... portion he comes to the conclusion that the declared invoice values wherever they are less than 55% of global price list. We find that, no reasoning what so ever as been given as to how he has arrived at such a conclusion. The original authority has not given any findings as to why the declare value should be rejected and the value should be re-determined following the valuation Rules. The learned appellant authority also has not gone into the details of the fact of the case and has given cursory findings without delving into the crux of the issue. The appellant authority simply affirms the findings of the lower authority. No reasons what so ever have been given as to why the declared prices have to be rejected and as to how the relationship has influenced, if any, the prices declared in the ICIN. Both, the lower authority and the appellant authority appear to have proceeded with a preconceived notion that the discounts over and above that have been allowed in previous SVB orders should not be allowed - Thus, neither the lower authority nor the appellant authority have rendered justice to the issue. Under these circumstances, we find that, the only way left for us is to set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Not Agent or Legal Representative of MSAS ; the foreign seller determines the prices for the appellant in respect of its import goods considering the Average Re-Sale Price; selling and Administrative Prices incurred by the appellant; and the Budgeted Gross Margin as determined by independent experts as per the Transfer Policy Guidelines, as may be seen from Distributor Agreement; these facts were not denied nor disputed in any manner by way of any evidences, findings, cross appeals or cross objections, in the proceedings thus far; the lower authorities have held that the discount above 45% were not permissible without any basis, contrary to evidences. 3 . Order-in-Original no.151/2013 dated 8-2-2013 considered all the relevant documents, previous orders and the affidavit filed by the appellant; though titled review, was not a mere a review of the earlier proceedings but a detailed study of all the changes including that in the pricing policy occurred, as per Para 8; it is worth mentioning that the order observes as following. the organizational and the relationship changes as well as switch over from USD to Euro currency, have not adversely affected the valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in the matter of price charged. Discounts in excess of 45% seen in Table 3 may persuade rational consideration. In the light of Tables 3 and 4 making it clear that commercial considerations appear to have played role in determination of sale price of the supplier with no regard to relationship . (on analysis made vide Table 6) in most of the cases, the discount given to related buyer is almost similar or only marginally varying 4 . After observing as above, the Adjudicating Authority observes contrary to earlier findings (Page No.34) that it is clear that there are two price lists; one, global price list applicable to all other than the related importer, and the other, ICIN price list applicable only to the related importer. This is different from the pricing structure available in the past. The system of Global price list was there in the past and commonly applicable to related importer and unrelated importers. At that time, 45% was considered reasonable. Special treatment through net discounted ICIN price list to the related importer is a recent development and any special treatment is unacceptable to valuation of goods for the purpose of adhering to provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general quotation and that . A discount is a commercially acceptable measure, which can be resorted to by a vendor for a variety of reasons including stock clearance Thus, the Global Price List is not sufficient to hold that the ICIN pricelist is a special treatment, as even higher discounts are given to independent buyers. 7 . The ICIN pricelists is a price list fixed for the distributors considering the commercial considerations as applicable to the distributorships and not on the basis of any relationship. There are a variety of commercial considerations, such as Stock clearance .as found acceptable in the Eicher case(supra); Old customer as held in Basant Industries Nunhai Vs Addl CC, Bombay 1996(81) ELT195, and these reasons are not exhaustive and not limited to the above, as it has repeatedly been held that the discounts are given for a variety of reasons. Thus, a distributorship is also a commercial consideration and as the commercial levels of a distributor and an independent buyer who is not a distributor would be different and thus a discount given to a distributor cannot be rejected that the price is lower than that of the import prices of independent b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny case, even such third parties were given much higher discount than the appellant which was not the case in the above cited case. In our case, there has been an exhaustive and extensive investigation in respect of import goods which is not the case in the cited case law and thus the same is distinguishable and not applicable to the facts of the present appeal. 9 . In the case of CC, Mumbai Vs Bureau Veritas others (CDJ 2005 SC 231=2005(181) ELT 3) In the case of CC, Mumbai Vs Bureau Veritas others 2005(181) ELT 3) the Larger Bench of Apex Court held that It is only when the transaction value under Rule 4 is rejected, that under Rule 3(ii) the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules. Conversely, if the transaction value can be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), there is no question of determining the value under the subsequent Rules . After having admitted that the relationship had no role in granting the varying discounts and only commercial considerations are given, it is not lawful and not proper to deny the same rationale in case of few other items whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated buyer; in the demonstration given in the Appeal memorandum, only a few products are illustrated in the appellant's favour, whereas, the 0-i0 has taken a detailed study based on the price lists submitted and arrived at the conclusions; the importer has not demonstrated the arguments by way of production of the Transfer Price Agreement and Global, Regional and Local Balance Sheets which are essential documents to substantiate the prices under the GAAT valuation rules; it is also seen that the ICIN is being revised at shorter intervals. It was prepared in 2010 and subsequently revised in 2011. 12 . The Learned AR submits that the 0-I-0 has demonstrated that there is no rationale for the arguments mooted by the importer that unrelated buyers have got more discounts for identical products and hence that relationship has not influenced the prices; comparison of Table 3 (showing cases where more than 45% discount is allowed for the importer) with Tables 4 5 in the 0IO shows that commercial considerations appear to have played role in determination of sale price of the supplier with no regard to relationship ; there is no uniformity in the pricing pattern for the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Effectively the difference between the list price and ICIN price works out to a average discount of 32%, which is lesser than the previously accepted discount of 45%; commercial consideration appear to have laid role in determination of sale price of the supplier with no regard to relationship and from the annual Financial Statement, it could be seen that they appellants have not made any other payment other than the purchase consideration and the royalties to the associated companies towards the supply of goods. We find that, the original authority all along to the discussion and findings as accepted the contentions of the appellants and has given categorical findings as above. However, in the order portion he comes to the conclusion that the declared invoice values wherever they are less than 55% of global price list. We find that, no reasoning what so ever as been given as to how he has arrived at such a conclusion. The original authority has not given any findings as to why the declare value should be rejected and the value should be re-determined following the valuation Rules. 15 . The original authority as also not given any reasoning or evidence to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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