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2012 (11) TMI 81 - AT - CustomsTransaction value - Related person – alleged that supplier and the respondents related in terms of Rule 2(2)(iv) of the Customs Valuation Rules – Held that:- In terms of Rule 2(2)(iv) persons can be deemed to be related only if any person directly or indirectly owns, controls or holds 5% or more of the outstanding voting stocks or shares of both of them - only if a third person directly or indirectly owns, controls voting stocks or shares of both the supplier and the importer, then the supplier and the importer can be deemed to be related - supplier and the respondents are not related - whether the relationship has influenced the price and whether the price approximates any of the test values as provided under Rule 4(3) do not arise in the absence of relationship itself not being established. Such examination is envisaged only where relationship is first established. The interpretation given by the original authority would amount to re-writing of Rule 2(2)(iv) to read that if the supplier has more than 5% of the shares in the importing company, then both would be deemed to be related. There is no warrant in law to do so. As regards the question of dealing with the royalties, licence fee etc., there are adequate provisions in the Customs Valuation Rules [for example, Rule 9(1)(c)] to deal with the same. - It cannot also uphold arbitrary enhancement of value by 20% without there being any basis for it.
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