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TMI Blog2023 (11) TMI 1039X X X X Extracts X X X X X X X X Extracts X X X X ..... CHNICAL) Shri B.K. Singh, Advocate for the Appellant. Shri A. Rangadham, AR for the Respondent ORDER The issue involved in this Appeal is whether there is relationship between OMIFCO (the exporter of the goods situated outside India) and KRIBHCO (importer in India/Appellant), and whether due to the alleged relationship the import price was influenced and consequently, whether Appellant is liable to pay the differential duty and consequential penalty, etc. 2. Heard the parties. 3. The brief facts are that IFFCO and KRIBHCO both are a Multistate Cooperative Society primarily engaged in manufacturing and distribution of fertilizers. On the basis of intelligence gathered by the DRI, the imports of urea by IFFCO and KRIBHCO were taken up for analysis and it was revealed that while the prevailing import price of urea is around US $ 410 per MT, both of them are importing urea from OMIFCO (in Oman) at about US $ 160 per MT. Whereas the study of the imports from OMIFCO revealed that the said company was a Joint Venture between the Oman Oil Company (50%), IFFCO (25%) and KRIBHCO (25%). Further, the import of urea and ammonia from the said company was on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to purchase on FOB Oman basis, under a long term takeor- 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 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 protected their interest conceived behind MOU signed between them by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove 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 Ammonia 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 are directly or indirectly controlled b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 impugned orders. 15. Witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) ELT 313 (Tri. Del.). Affirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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