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2014 (10) TMI 186 - AT - CustomsValuation - Import from related parties - loading of overhead and profit margin - STPI unit for development of software and Information Technology Enabled Software and export thereof - Held that:- For the shipments made from April 2006 to April 2008, the appellants have admitted that their supplier has not made any addition of overheads in the invoice price. - in terms of Valuation Rules, for determining the correct transaction value of the goods supplied by the related person, addition of overheads and other charges are essential to arrive at the transaction value. The lower authority by taking into various factors has ordered for loading only a nominal 10% which appears to be well within the provisions of the Rules. Considering the fact that for the post-2008 imports, the percentage of overheads as arrived by the supplier from 5% to a maximum of 38%, whereas the lower authorities has ordered for only 10% which is just and reasonable. Accordingly, we are of the considered view that addition of 10% under 'overheads' on the imports made from April 2006 to April 2008 is justified. Loading of profit margin - Held that:- As regards loading of 10% profit in the invoice price, on perusal of records and the findings of the adjudicating authority, we find that the lower authority has not brought out any reasons for arriving the quantum at 10% towards profit margin. - although there is no dispute on the fact that both the supplier and the appellants are related persons in terms of Rule 2 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, M/s.Google Inc. USA are not selling the goods and buying for trading purpose but being a principal company of the appellant, they have procured the goods on the global basis for supply to their own affiliated group companies located across the world. In terms of the Valuation Rules, notional profit element shall be added to the invoice price for arriving at the transaction value - the loading of 10% profit margin on the invoice value appears to be on the higher side. - since the appellant is a STPA unit and also taking into the fact that the imports made by the appellant from the supplier i.e. Google Inc. is only for the purpose of development of software and export and also taking into consideration the principal supplier has not sold these goods to any third party but supplied to their affiliated companies only, loading of a nominal profit of 1% (one percent) on the declared value would be suffice. - Decided partly in favour of assessee.
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