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2020 (6) TMI 285 - AT - CustomsValuation of imported goods - Diammonium Phosphate (DAP) - related party transaction - whether the relationship has influenced the value of goods imported, or not? - HELD THAT:- Sub rule 3(3) (a) mandates that even if the buyer and seller are related, the transaction will be accepted if the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. In the instant case, the appellant have claimed that their transactions with the foreign supplier have been subjected to detailed examination by SVB and SVB has come to the conclusion that the transaction between them are not influence by relationship and, therefore, the same can be accepted. SVB order no. SVB/CUS/11/PV/2006 dated 22/06/2006 allows acceptance of the declared price only in the circumstance when no contemporaneous imports at higher price are noticed - In the instant case, it is seen that the goods imported by M/s Tata Chemicals Ltd. which were identical in nature, from the same supplier and the same country of origin imported at the same bottom cargo from the same port have been assessed at a much higher price. Thus, the Revenue is relying on conditional acceptance of the declared price as per para 11 of the SVB order dated 22/06/2006. The data given by the appellants confirms and the duty has always been paid on the price contracted with supplier and such price always corresponded to the prevailing price in the international journals. The evidence produced suggests that even when the prices published in international journals at the time of import were much lower the appellants paid duty on the contract prices which were much higher than the prevailing international prices - The dispute is if at the time of contract is not seen as relevant or the price at the time of contract. In the section 14 of the Customs Act, 1962, the price at the time of contract is more relevant. The interpretative Rule to the rule 3(3)(a) clearly lays down that “Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price” - if the price fluctuation is reasonably explained the same can be accepted. In the instant case cogent reasons have been given along with evidence and post practice details. Appeal allowed - decided in favor of appellant.
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