9911796707
TMI Blog2024 (10) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... y procured. From the order, it is also seen that there was no technology transfer and hence, no payment of technical know-how fee or Royalty between the buyer and the seller. The products imported by the appellant were not manufactured by the supplier but procured from third party suppliers. Since, no evidence was placed on record that the overhead costs remained constant and the supplier was playing only a role of facilitator, 10% loading to the transaction value was ordered under the Customs Valuation Rules, 1988 read with Section 14(1) of the Customs Act, 1962. This order was valid for 3 years up to 10.09.2010. In view of the major changes in terms of Rule 3 and 12 brought about in the new Customs Valuation Rules, 2007, the Authorities have to give necessary reasons for rejection of value during the relevant period - Almost after 6 years, the Authorities below have without considering these factors loaded the transaction value based on the SVB order dated 11.09.2007 which expired on 10.09.2010, hence lost its validity and therefore, the present impugned order which relies on the earlier SVB order cannot be sustained. Moreover, during the relevant period, the Customs Valuation Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished by the appellant and also there is no dispute that they are related parties; the transaction value cannot be accepted, hence renewal of the SVB order by loading 10% was in consonance with the residual method of Valuation Rules, 2007. Aggrieved by this order, the appellant is in appeal before us. 3. The learned counsel submits that the appellant is a wholly owned subsidiary of M/s. Biesse SPA Italy, are engaged in the manufacture of woodworking machines falling under chapter heading 8466 9200. The appellant also undertakes trading activity wherein they import woodworking machinery and spare parts of the said machinery from M/s. Biesse SPA Italy and sell them to the domestic customers. It is submitted that in the earlier Order-in-Original No.6664/2007 dated 11.09.2007 passed by the Assistant Commissioner (SVB) held that the appellant and the supplier were related parties and that the said relationship had influenced the transaction value because of which the transaction value was accepted only after loading of 10% on the transaction value. In an appeal, the Commissioner (Appeals) upheld the order against which an appeal was filed before this Tribunal. This Tribunal vide Final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed vis- -vis imported by the related persons based on the Hon ble Supreme Court s decision in the case of Mirah Exports Pvt. Ltd. vs. CC: 1998 (98) ELT 3 (SC). It is submitted that the commercial levels are also to be considered as is held in the case of CC, Chennai Vs Hewlett Packard Ltd. [1999 (108) ELT 221 (Tri). 3.3 The learned counsel further submitted that as per the new Rule 3(3)(a) of the Customs Valuation Rules, 2007 where the buyer and seller are related, transaction value shall be adopted if the relationship did not influence the price as it was held in the case of CC vs. Prodelin India (P) Ltd.: 2006 (202) ELT 13 (SC). It is further submitted that the onus lies on the department to prove that the declared price did not reflect the true transaction value as is held in the case of CC vs. Sysmex Transasia Bio Medicals Pvt. Ltd.: 2014 (313) ELT 68 (Tri-Mumbai). It is also stated that only when the transaction value is rejected under Rule 3 of the Customs Valuation Rules, it shall be determined by proceeding sequentially from Rule 4 to 9 of the Customs Valuation Rules, 2007. Relied on Eicher Tractors Ltd. vs. CC, Mumbai: 2002 (122) ELT 321 (SC) and CC vs. Bureau Veritas: 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he supplier was playing only a role of facilitator, 10% loading to the transaction value was ordered under the Customs Valuation Rules, 1988 read with Section 14(1) of the Customs Act, 1962. This order was valid for 3 years up to 10.09.2010. The above order was clearly issued under Customs Valuation Rules, 1988 read with Section 14 of the Customs Act, 1962. The above order was upheld by the Commissioner (Appeals) and on further appeal, the Tribunal Vide Final Order No.42794/2017 dated 07.11.2017 as reported in 2018 (364) ELT 245 (Tri. Mad) upheld the loading of 10% by observing as follows: 7. From the facts on record, it emerges that the appellants are 100% fully owned subsidiary of M/s. Biesse SPA, Italy, who is the supplier and seller. There is no doubt that the buyer and seller are related 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 val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with provisions of rule 10; (2) Value of imported goods under sub-rule (1) shall be accepted : Provided that - (a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which - (i) are imposed or required by law or by the public authorities in India; or (ii) limit the geographical area in which the goods may be resold; or (iii) do not substantially affect the value of the goods; (b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. Almost after 6 years, the Authorities below have without considering these factors loaded the transaction value based on the SVB order dated 11.09.2007 which expired on 10.09.2010, hence lost its validity and therefore, the present impugned order which relies on the earlier SVB order cannot be sustained. Moreover, during the relevant period, the Customs Valuation Rules, 2007 dated 10th October 2007 are the relevant Rules and these Rules are a major deviation from the earlier Valuation Rules, 1988 in view of the fact that Rule 3 and 12 specifically lays down the procedure for rejection of transaction value. 5.3 The Hon ble Supreme Court in the case of Century Metal Recycling Pvt. Ltd. vs. Union of India: 2019 (367) E.L.T. 3 (S.C.) dated 17-5-2019 observed as follows: As per sub-rule (2) of Rule 12, the proper officer when required must intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared. The said mandate of sub-rule (2) of Rule 12 cannot be ignored or waived. Formation of opinion regarding reasonable doubt as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
