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2008 (10) TMI 546 - AT - CustomsValuation of the goods (spare parts) imported by the appellants - Related persons - Rejection of transaction value - difference in price levels between the appellant and also the third parties - appellant is a subsidiary of the German company - third parties are mainly the EOUs - EOUs do not pay any Customs Duty - price mentioned in the International Price List was taken as the basis and a discount of 35% was given to the appellants - CIT (A) upheld the decision. HELD THAT:- Appellants have given the expenditure incurred by their office in India. From this, it is very clear that the effective discount enjoyed by the appellants is only 59% in view of this administrative cost incurred by them. This point has not been taken into consideration by the learned Joint CIT and also the CIT(A). A similar case was the subject matter of the decision of the Tribunal in the case of CC, Chennai v. Hewlett Packard Ltd. [1998 (7) TMI 282 - CEGAT, MADRAS], wherein the valuation in respect of different classes of buyers have been elaborately dealt with. Related persons importing goods in bulk for stock and sale whereas individual consumers importing a small quantity of actual use, both constitute different classes of buyers especially when the relation between the buying company and the seller is not affecting the transaction. Here also, the transaction between the buyer and the seller is based on the Inter Company Price Agreement. It is not something very arbitrary. The appellants carry out stock and sale. They also undertake after sales service. All these factors have been taken into account while giving a discount of merely 76% to the appellant from the International Price List. We should not take that 76% as abnormal and fix an arbitrary discount. It has also been held that activities of stock and sale undertaken by subsidiary company should not be considered as indirect payment to seller as it is beneficial both to the subsidiary company and the seller. Cost of such activities should not be added to the price actually paid or payable in determining the value of the imported goods. In fact, the Interpretative Notes to Rule (4)(3)(b) of the Customs Valuation Rules had already been referred to. Therefore, we do not find any justification for rejecting the Transaction Value in this case. It is also to be borne in mind that the adjudicating authority has accepted the Transaction Value in respect of two items considering the quantum of imports made by the third parties and the appellants. The same logic should be applied in respect of the other two categories also. This has not been done. Hence, we do not find any justification for rejecting the Transaction Value. Thus the appeal is allowed with consequential relief.
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