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TMI Blog2023 (3) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to show that the relationship between the parties has influenced the price. Therefore, the reasons for rejecting the transaction value is not in consonance with law and therefore liable to be set aside. Appeal allowed - decided in favour of appellant. - Customs Appeal No. 10838 of 2016- DB - Final Order No. A/10472/2023 - Dated:- 17-3-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri B.K Singh, Advocate for the Appellant Shri Ajay Jain, Special Counsel (AR) for the Respondent ORDER The issue involved in the present case is that whether there is a relationship between OMIFCO and KRIBHCO, the appellant and Government of India and due to this alleged relationship whether the import price was influenced and consequently whether the appellant is liable to pay the differential duty. 2. Shri B. K Singh, Learned Counsel appearing on behalf of the appellant at the outset submits that this is an identical case of appellant itself which has been decided by this Tribunal vide order no. A/11354-11358/2022 dated 11.11.2022. He submits that this appeal was separated due to the reason that the appellant have pressed one more issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the equity participation in the new JV company was 25% of KRIBHCO, 25% of IFFCO and 50% Oman Oil Company. Oman Oil company Ltd. were expected exclusive to provide natural gas to be proposed fertilizer plant under a long term supply agreement at a price determined and stated in the said MOU. Both the Appellants would be committed to purchase on FOB oman basis under a long term take-or-pay contract, on terms and conditions to be agreed upon, 100% of urea production of the fertilizer plant at price equal to defined calculated floor price or the market price of urea at FOB Oman, whichever is greater. The calculated floor price (CFP) of urea was defined to mean a price necessary to yield a 10% internal rate of return (IRR) on the equity investment in the fertilizer project. Appellants would be entitled to a urea sales fee at the rate of $3.50 per MT. in consideration of the sale and take-or-pay expense incurred by them. Thus in pursuance of the said MOU dtd. 30.07.1994 and the Joint Venture agreement dated 02.04.1997 was signed between Appellants and Oman Oil Co. Ltd. a new JV Company in the name and tile of Oman India Fertilizer Company LLC ( OMIFCO) was formed with equity participati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 20.02.2000 an Ammonia off-take Agreement was signed on 29.05.2002 between the IFFCO and OMIFCO. As per the said agreement IFFCO had agreed to enter into the agreement in pursuance of the JV agreement dated 20.10.2000, for purchase of the surplus Ammonia produced or to be produced at Fertilizer Plant over and the above that required for urea production. In terms of said AOTA , OMIFCO shall offer to sell to IFFCO, FOB, the loading terminal, all of the Ammonia produced from and after the date of Commencement of production. The price at which the Amonia was to be sold to IFFCO was stated in clause 5 of the said agreement. 11. The above facts not disputed in the present matter. We find in the present matter adjudicating authority held that IFFCO/KRIBHCO as the importer and the Government of India through the department of fertilizer, fall within the ambit of related person in terms of the Rule 2(2) (i) (ii) and (vi) of the CVR, 2007. The said provision reads as under : Rule 2 (2) For the purpose of these rules, persons shall be deemed to be related only if - (i) they are officers or directors of one another s businesses; (ii) they are legally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by all or any of them acting for all. Partnership is formed through an agreement. In the present matter there is no partnership agreement between the Appellants and OMIFCO, so they cannot be treated as legally recognized partners only because the Appellants hold 50% share in OMIFCO. 13. Further, Rule 2 (2)(vi) of CVR, 2007 states that person shall be deemed to be related only if both of them are directly or indirectly controlled by a third person. In the present matter revenue failed to show that who is the third person who controls Appellants. From the facts of the case it is also clear that none of the party involved in the present transactions controlled each other. Accordingly, based on the undisputed facts of this case the appellants and the GOI and OMIFCO are not related persons in terms of Rule 2 (2)(i), (iii) and (vi) of Customs Valuation Rules 2007. 14. It is a settled principle of law that the authority making the allegations has to prove with sufficient evidence. In the instant case, leaving alone the evidence, even reasons to entertain such a belief have not been properly brought forth or established. Therefore, we find that the impugned orders do not stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2002 from the customs duty and additional customs duty leviable under sub-section 1 of Section 3 of the Customs Tariff Act subject to condition that the importer produce the certificate to effect that the declared value is in the terms of agreed price under UOTA. The important aspect is not the exemption but the acceptance by the Government about the correctness of the price under UOTA. The goods imported in this matter have followed the said LTP price only. In the present matter impugned orders and department had not established that the price of the goods imported by the Appellants was influenced by the relationship between OMIFCO. 15.2 We also observe that in the matter of Commissioner of Customs, New Delhi vs. Prodelin India (P) Ltd. 2006 (202) E.L.T. 13 (S.C.) the Hon ble Supreme Court held that: 28. Even assuming for argument s sake that the respondent and M/s. PC USA are related persons even in that case their transaction value is to be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. Further we find that following decisions also support the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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