TMI Blog2015 (12) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... t this entire amount as additional consideration for import of goods in order to arrive at the loading factor is not sustainable. But as stated earlier, we are only concerned with Rule 4 of CVR, 2007 (which the adjudicating authority has used for loading the value) and not with Rule 10 thereof while the contention of ld. DR falls within the ambit of Rule 10 (which has not been used by the adjudicating authority to arrive at loading) and for this reason it is not necessary to discuss this contention of ld. DR or for that matter the contention of the appellant that expenses incurred were not incurred as condition of sale of goods and so the judgments cited by both sides regarding inclusion (or otherwise) of the expenses incurred by the appellant in the assessable value in terms of Rule 10 do not remain germane to the issue - loading of 12.5% is not sustainable in terms of Rule 4 of the CVR, 2007 - Decided in favour of assessee. - Customs Appeal No. 50868 of 2015 - Final Order No. 53695 / 2015 - Dated:- 4-11-2015 - Mr. G. Raghuram, President And Mr. R. K. Singh, Member (Technical) For the Petitioner : Sh. N. Venkatraman, Sr. Advocate with Sh. R. Murlidharan and Sh. Dheeraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g are post- importation expenses and therefore are not includible in the assessable value. The appellant showed that these post import expenses actually amounted to 12.5% which showed that the transaction value was not influenced by the relationship. (vii) The appellant has incurred expenses considering the business requirement in India. Out of ₹ 8.32 crores of such expenses, ₹ 3.28 crores were accounted for by amount reimbursed by the appellant to the foreign supplier as these expenses were incurred by the foreign supplier on the appellant s behalf to promote sale of its products in India. As these expenses were reimbursed by the appellant they cannot be considered as consideration towards the imported goods. (viii) The appellant was not obliged to incur these expenses in terms of distribution agreement with overseas supplier and therefore these were not incurred as a condition of sale. It cited the judgments in the cases of Union of India vs. Mahindra Mahindra Limited - 1995 (76) ELT 481 (SC), CC vs. Toyota Kirloskar Motor Pvt. Ltd. - 2007 (213) ELT 4 (SC) and CC vs. Essar Steel Ltd. - 2015 (319) ELT 202 (SC) to support the proposition that post import expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier are related persons in terms of Rule 2(2) of the Valuation Rules, 2007 (ii) Whether the transactions between the Importer and the Foreign Supplier are influenced by such relationship and (iii) Whether any addition on account of payment of royalty, technical know-how fee, interest etc. made by the Importer to the Foreign Supplier is required to be made to the assessable value of the goods imported by the Importer from the Foreign Supplier under Rule 10 of the Valuation Rules, 2007. But in the remaining discussion and finding portion, nowhere the Commissioner invoked Rule 10 for the purpose of loading the value. As a matter of fact, as is evident from the order portion of the impugned order the transaction value has been loaded by 12.5% (only) in terms of Rule 4 of CVR, 2007. Therefore, we do not think it necessary or relevant to dwell on the aspect whether the expenses on advertisement and sales promotion etc. incurred by the appellant are includible in the assessable value in terms of Rule 10 because the adjudicating authority has not invoked the Rule 10 for loading the declared value. 6. As the loading has been determined by the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause (b) of sub-rule (1) is found the transaction value of identical goods sold at a different commercial level or in different quantities or both is required to be adjusted to take account of the difference attributable to the commercial level or to the quantity or both and such adjustments is required to be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustments. The appellant has been able to demonstrate that as a distributor its imports were at a different commercial level and in much larger quantity compared to the imports made by the individual retailers. From the tables given in paras 7 and 14 of the adjudication order used to arrive at the finding that the price declared by the appellant was 12.5% lower when the price paid by individual retailers, we find that there is not even a whisper as to what were the commercial levels or quantities involved in respect of invoice dated 22.11.2011 for imported goods by some unrelated importer and invoice dated 12.12.2012 for imports made by the appellant. These two invoices have been mentioned in the said tables. Thus, the comparison of price per piece on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt has to be taken of demonstrated difference in commercial levels, quantity levels and adjustments in accordance with the provisions of Rule 9. Now the facts of this case are undisputed regarding the contemporaneous imports at higher price cited by revenue. However, learned Advocate for the appellant has seriously contended that the levels, both commercial and of quantity, in the two imports are very widely different. We find great merit in this argument, because it would be totally illogical to compare the value of 5 pieces of goods imported directly by consumers for actual use whose cumulative value is only ₹ 7.5 lakhs with imports of similar goods running into hundreds of crores on 300 or more Bills of Entry per month by HPL. (para 21). Similar view was held in the case of Komal Precision Tolls India Pvt. Limited (supra). 7. Regarding the contention of ld. DR that the appellant was required to incur expenses on advertisement, sale and promotion etc. as per the distribution agreement and such expenses also turn out to be 12.5% which was the discount given to the appellant vis-a-vis the price charged from the independent retailers and therefore the loading is justi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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