2013 (8) TMI 235 - AT - Customs

Valuation of imported goods - related parties - section 14 - Department was of the view that supplier and the respondents are related person and the relationship has influenced the transaction value - Appeal filed by revenue for setting aside the order for enhancing the assessable value Held that - mere holding of shares by one party with proportional nominee directors in the other company does not amount to a relationship to disqualify transactional value court relied upon Modi Senator (I) Pvt. Ltd. vs. CC (I&G) New Delhi- (2009 (3) TMI 808 - CESTAT NEW DELHI ) - even before the amendment of Section 14 and for the period thereafter as per the definition of related person u/s 14 - there should be two way interest between the buyer and seller was insufficient as the statutory requirement of buyer and seller having no interest in the business of each other does not imply that neither buyer has interest in the business of the buyer appeal decided against revenue.

Summary

Issues:
Revenue's appeal against Order-in-Appeal setting aside enhanced assessable value.

Analysis:
The case involved an appeal by the Revenue against the Order-in-Appeal that set aside the lower adjudicating authority's decision to enhance the assessable value of a consignment of medical equipment imported by the respondents. The dispute arose from the relationship between the supplier and the respondents, with the department alleging that the transaction value was influenced by this relationship. The lower adjudicating authority had increased the declared value by 50%, prompting the respondents to appeal. The Commissioner (Appeals) found no basis for the enhancement and ruled in favor of the respondents, leading to the Revenue's appeal.

The Revenue argued that the relationship between the supplier and the respondents rendered the declared value unacceptable. They contended that the respondents failed to produce requested documents, justifying the 50% value enhancement. The Revenue criticized the Commissioner (Appeals) for not providing grounds for rejecting the enhanced value and for setting aside the order without sufficient reason. They suggested the case should have been remanded for document production.

In response, the respondents' advocate emphasized that mere relationship alone should not justify value enhancement, especially without concrete evidence. They cited legal precedents, including a Supreme Court decision and a Tribunal ruling, to support their position.

Upon reviewing the submissions and evidence, the Tribunal found that while the supplier and respondents were related, the department failed to demonstrate how this relationship affected the transaction value. Additionally, the Tribunal noted the arbitrary nature of the 50% value enhancement and referenced legal precedents to support their decision. They highlighted the onus on the department to prove discrepancies in declared value and upheld the Order-in-Appeal.

Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the Order-in-Appeal as it found no valid reason to interfere with the decision. The judgment emphasized the importance of concrete evidence and legal principles in assessing transaction values, especially in cases involving related parties.