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TMI Blog2023 (10) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed. - MR. P. DINESHA, MEMBER (JUDICIAL) AND MR. M. AJIT KUMAR, MEMBER (TECHNICAL) Shri R. Rajaraman, Assistant Commissioner for the Appellant Shri Rohan Muralidharan, Advocate for the Respondent ORDER These appeals are filed by the Department against Order-in-Original No. 02/2016 dated 11.08.2016 passed by the Commissioner of Customs, No. 1, Williams Road, Cantonment, Tiruchirappalli and Order-in-Original No. 11/2016 dated 17.06.2016 passed by the Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin. 2. Brief undisputed facts as recorded in the impugned orders are that on the basis of intelligence gathered by the Directorate of Revenue Intelligence (DRI), Ahmedabad, the imports of urea by the respondent were taken up for analysis and it was revealed that while the prevailing import price of urea was around US$ 410 per M.T., M/s. Indian Farmers Fertilizer Co-operative Limited (hereinafter referred to as IFFCO ) had imported urea from M/s. Oman India Fertilizer Company, Oman (hereinafter referred to as OMIFCO ) at about US$ 160 per M.T. A study of the imports made from OMIFCO further revealed that the said company was a joint ventu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Shri Rohan Muralidharan, Ld. Advocate appearing for the respondent, while relying on the findings in the impugned order, has also submitted that the issue is no more res integra since the very same issue has been considered by the co-ordinate Ahmedabad Bench of the CESTAT in the respondent s own case in Indian Farmers Fertilizer Co-operative Ltd., Krishak Bharati Co-operative Ltd. v. Commissioner of Cus., Kandla ors [2023 (1) TMI 155 - CESTAT, Ahmedabad] [Final Order No A/11354-11358/2022 dated 11.11.2022 in Customs Appeal No. 11133 of 2015 ors] wherein they have also taken note of the earliest order of this very Bench of the Tribunal in the case of Krishak Bharati Co-operative Ltd. (KRIBHCO) [2019 (12) TMI 1627 CESTAT, Chennai] [Final Order No. 41756 of 2020 dated 09.12.2019 in Customs Appeal No. 42336 of 2016], i.e., the other party to the agreement, to hold that the declared value was in order and that the relationship of any of the parties did not influence the import value. 9. After hearing both sides, we find that the only issue to be decided by us is: whether the impugned orders by which the further proceedings were dropped are in order? 10. We have gone throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and stated in the said MOU. Both the Appellants would be committed to purchase on FOB oman basis under a long term take-orpay 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 takeor-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 participation as envisaged in the MOU, i.e KRIBHCO - 25%, IFFCO 25% and Oman Oil Ltd. 50%. In addition, in the Board of Directors of the new company there is equal number of Directors nominated by either side. It is evident that the GOI and Sultanate of Oman have protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced 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 recognized partners in business; (iii) They are employer and employee; (iv) any person directly or indirectly owns, controls or holds 5 per cent or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (vi) both of them a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the scrutiny of law. We find that declared prices cannot be reviewed without any evidence to the effect that the relation between the appellants and sellers has influenced the declared price or to the effect that there was a flow back of money from the importer to the related supplier. Therefore, we don t find any substance to sustain the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 appellants. (i) Sew-Curodrive (I) Pvt. Ltd. Vs. CC. 2012 (284) ELT 294 (Tri) (ii) Gemplus India Pvt. Ltd. Vs. CCE- 2005 (185) ELT 269 (Tri.) (iii) CC Vs. Hewlett Packard Ltd. 1999 (108) ELT 221 (Tri.) (iv) Volvo India Pvt. Ltd. Vs. CC -2005 (180) ELT 489 (v) Modi Senator (I) Pvt. Ltd. Vs. CC (Import General), New Delhi 2009 (247) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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