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TMI Blog2014 (10) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... nabled Software and export thereof. They are availing full exemption from payment of Customs duty under Notification No.52/2003 dt. 31.3.2003 on imports i.e. Desktops, Laptops etc. from various suppliers and other equipments from M/s.Google Inc., USA. Since Google Inc. (Supplier) holds one share (0.001%) in the appellant-company and M/s.Google International LLC holds 99.99% of shares in the Indian company i.e. appellant. and the Board of Directors of the appellant-company are also represented by employees of Google Inc., USA, the Customs Special Valuation Branch, Chennai has taken up the issue and registered a case for determining the relationship and valuation of the imports made from their related supplier. After issuing detailed questionnaire to the appellants, and upon receipt of replies and documents and also after personal hearing, the Deputy Commissioner (Customs), Special Valuation Branch, Chennai vide Order-in-Original No.13413/2010 dt. 3.11.2010 held that both the appellant and M/s.Google Inc., USA are related in terms of Rule 2 (2) of Customs Valuation (Determination of Value of Imported Goods) Rules 2007, rejected the declared invoice price and ordered for loading price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at whenever group companies need certain goods, the same will be resourced to them immediately. He therefore submits that loading of profit is not justified. He also submits that they have also made certain purchases directly from their approved vendors around the same time and at the price which is higher than the invoice price declared by the supplier. Therefore, he submits that invoice price should be accepted. He also submits, if at all the profit is to be loaded on the invoice price, it should be only of nominal profit in the range of 0.5% to 1% as there is no profit involved between the supplier and the appellant. 5. Ld. Advocate relies on the following decisions :- (a) Siemens Ltd. Vs CC New Delhi - 2000 (126) ELT 1134 (Tribunal) (b) CC, Mumbai Vs Clariant (India) Limited 2007 (210) ELT 481 (SC) (c) CC, MUMBAI Vs Mahalaxmi Gems 2008 (231) ELT 198 (SC) (d) CC, Calcutta Vs South India Television (P) Ltd. 2008 (214) ELT 3 (SC) (e) CC KOLKATA Vs Initiating Explosives Systems (I) Ltd. 2008 (224) ELT 343 (SC) 6. On the other hand, Ld. A.R reiterates the finding of the adjudicating authority and the lower appellate authority. He submits that the appellants are related person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other documents produced by the appellants, we find that for the period after April 2008, M/s.Google Inc. USA has started computing the Material Overhead (MOH) on all the goods supplied to the appellants. It is seen from the worksheet submitted by the appellant that the supplier had computed the overheads on the goods by taking into account various expenses like logistics, freight and capital purchases by pooling all the expenses as per the following formula :- MOH = Cost Pool (cost center expenses, i.e. freight, logistics etc.) ______________________________________________ Capital purchases (Capex) Further, it is seen that the percentage of overheads varies from 5% to 33% during the relevant period and it is also noticed this percentage varies for each quarter in the same year. It is seen from records that since the invoice price for all the imports made after April 2008 the cost of overheads already built in the invoice price, further addition of 10% as overheads on the invoice price will certainly amount to loading overheads twice. 10. Further, we find that in certain cases, the percentage of overheads as computed above is more than 10% and upto a maximum of 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a single global mechanism pursuant to which Google an its Affiliates may acquire Cisco Systems, In. ("Cisco") Products and/or Services in multiple countries from Dimension Data and its Affiliates. When Google or one o its Affiliates wishes to acquire Products and/or Services, the parties shall execute a Purchase Order and such other documents as specified herein describing the Products and/or Services that Dimension Data or its Affiliate will provide, the associated charges, the Location to which such Products and/or Services will be provided, and any additional terms agreed to by the parties. This Agreement permits Google to obtain Quotas and place Purchase Orders internationally using a centralized model, a local model, or a combination of models, depending on the requirements of Google and availability of the models." (emphasis supplied) It is also seen that lower authority has held that on the basis of common trade practice that any supplier of the imported goods normally adds profit margin in the normal course of transaction value. We find that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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