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2024 (4) TMI 1019 - CESTAT CHENNAITransaction value - Valuation (Customs) - Related person - loading of import value - Modular panels of different sizes for use in the construction industry - imports raw materials - provisional duty assessment - special or abnormal discount to the related buyers which were in excess of 3% discount - HELD THAT:- We find that the Chairman and Managing Director of Paschal Germany has confirmed that their normal trade practice in the course of international trade is to offer discount at the range of 25% to 40% of the normal sale price to all their customers located across the globe including the group companies/ affiliates. The importer has also demonstrated that even at the time that they were not in existence in India their parent company had allowed 25% discounts to buyers like NCC in India. The cash discount of 3% is allowed by the parent company if the subsidiary pays the import bills within the time. No cash discount was ever availed by the Appellant as the import payments could not be made to the suppliers within the time. The cost construction statement duly certified by the CA shows that on average the profit margin was around 16%. None of this was refuted through facts. The OIO also mentions that the learned Adjudicating Authority did not find any cash flow back towards Royalty/ Technical Know-How fees/ Licence fee in respect of the imported goods. We find that the department at the first instance has not shown any concrete reason to discard the transaction value. The OIO states that ‘it appears that the importer is giving 25% discount to their related parties and may be another 3% as per the terms and condition of the price list.’ He goes on to opine that ‘there can not be mass production of such machinery plant which warrants such huge discount’, without any factual substantiation. The whole arguments to discard the transaction value are based on conjectures and surmises. This being so the question of determining a fresh value as per the CVR does not arise. The Commissioner (Appeals) after examining the matter is also unsure about the exclusive nature of the discounts affecting the transaction value on the imported goods and states in conclusion that ‘the discount enjoyed by the importer appears to be a special one made only for related importers’. On the other hand he has gone beyond his statutory functions, traversed beyond the scope of the appeal and taken on the role of an investigator directing the lower authority to examine why the loading of value should not be at 25%. Hence the impugned order must fail both for sustaining the OIO which was based on conjectures and surmises and could not give any concrete reasons to discard the declared transaction value and further for exceeding his statutory functions by ordering a fresh enquiry. Thus, we set aside the impugned order. The appeal succeeds and is disposed of accordingly.
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