TMI Blog2005 (3) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ales person with the external (non group) customer. A specific margin is fixed by the Tax Department for each range of products. Therefore, there is not any basis to come to the conclusion that the relationship between the foreign supplier and the appellant has influenced the price of the imported goods. It is very difficult to compare the prices of the cards imported by the appellants and the other independent buyers. The appellant, who has a Product Supply Agreement with the supplier, is a regular importer whereas the imports of others are very negligible. We cannot expect the same prices in both the cases by reason of difference in commercial level and quantity of imports. Moreover, in order to apply Rule 5 of the Customs Valuation Rules, we have to take into account the commercial level and the quantity of goods being valued. As rightly contended by the appellant, the transaction value of the imports made by them as traders/dealers cannot be compared with the transaction value of the imports made by the actual users. In summing up, we observe that :- 1.Though the appellant and the foreign supplier are related, the price of the imported goods is fixed based on market driven pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs has actually influenced the facts. The original authority came to the conclusion that the variation in price offered to the appellant and other independent buyers in India ranges from 21% to 51%. On the basis of the data supplied by the appellants themselves, the original authority arrived at a figure of 39.67% as the average difference in price. This average is wrongly mentioned in para 6 as 35.67%. But in para 11 of the OIO, the correct figure of 39.67% has been indicated. The Adjudicating Authority rejected the transaction value and proposed to load the invoice value by 50% of the average actual difference, which is actually 20% (50% of 39.67%). Strangely, the appellants took advantage of the wrong figure mentioned in page 5 and were successful before the first Appellate Authority to reduce the loading factor to 17.83%. Be that as it may, the appellants challenge the very loading itself. The learned Advocate urged the following points : (i) The Commissioner (Appeals) has not followed the provisions of Rule 4(3) of the Customs Valuation Rules, 1988. She has taken into consideration the data as mentioned in the OIO rather than the records and the documents submitted before her. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the lower authority has not followed correctly Rule 5 of the Valuation Rules in re-determining the assessable value. The learned Advocate relied on the following judgments : (a) Elite Packaging Industries v. CCE - 1992 (60) E.L.T. 311 (T) (b) Punjab Niryat Ayat Pvt. Ltd. v. CC - 1992 (58) E.L.T. 340 (T) (c) Polyvinyl Industrial Corpn. v. CC - 1994 (74) E.L.T. 426 (T) (d) Eicher Tractors Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.) (vii) The transaction value of the imports made by them as traders/ dealers cannot be compared with the transaction value of the imports made by the actual users. Reliance is placed on the decision in the case of Atco Industries Ltd. v. CC - 1992 (57) E.L.T. 654 (T). 4. The learned JCDR referred to the relevant provisions in the Customs Valuation Rules and said that the lower authority has fairly taken into consideration the fact of personalization of sim cards and the quantity imported by the appellants in allowing 50% of the average price variation as loading factor of the transaction value of the appellants. Referring to the figures mentioned in the OIO, she stated that all these data have been supplied by the appellants themselves. A perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 days (or as when it is required without any interest for the delayed period of receipt of the goods and invoice raised by GTA on GIPL for a particular consignment. 7. From the above, it is very clear that the price of the imported items is mutually agreed between the supplier and the importer depending upon the prevailing market driven prices, demand by customers. In their letter to the Deputy Commissioner (Special Valuation Branch), the appellants have stated that on the basis of the market requirement, quantity, price and the competition that prevails, the price is negotiated and finalized on purely principal to principal basis. The orders to our suppliers are processed based on the purchase order received from our customers with quantity and price. Our supplier invoices us on FOB/CIF basis after deducting the necessary margin, sales tax/octroi and duty. The pricing methodology adopted is based on OECD transfer price Guidelines. Gemplus India takes risk of exchange variation, customs duty risk, receivable risk, direct expenses of salesmen/operations (including Travel and Communication) and other risk of local tax variations on its own account . They have also stated in the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the department with another import made by yet another importer in respect of only 34 MTs. It was held that the department was wrong in having applied by similar goods test under Rule 6 read with Rule 5(1)(b). The Tribunal held that not only the quantities were different but even the grades were different and so similar goods test was not applicable. The appellants have also urged the point that in respect of cards directly imported by unrelated buyers, cost of personalization is included in the value of the cards imported by them. As such, the price of the said cards imported by them is higher than the cards imported by the appellants. 8. In summing up, we observe that :- 1. Though the appellant and the foreign supplier are related, the price of the imported goods is fixed based on market driven prices leading to the conclusion that the relationship has not influenced the price. 2. The appellants regularly import the goods in huge quantities for testing the market conditions. In doing so, they function as traders of the goods imported. But, the independent buyers who imported goods directly are actual users. The trader and the actual user are not at the same commercial level ..... X X X X Extracts X X X X X X X X Extracts X X X X
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