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2015 (12) TMI 1345 - CESTAT CHENNAI

2015 (12) TMI 1345 - CESTAT CHENNAI - 2016 (343) E.L.T. 712 (Tri. - Chennai) - Valuation - Loading of transaction value of spares ordered by the DC (SVB) and whether the commission received from the foreign supplier is to be loaded to the transaction value or otherwise - Held that:- DC (SVB) while determining the relationship and while finalizing the transaction value held that 17% commission received from the foreign supplier be added to the transaction value of the imported goods, on the groun .....

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hird party imports. We also find that the appellate authority has not brought out any clear findings on the relationship between the appellant and the foreign supplier. In fact, the Commissioner (Appeals) has admitted that there is no detail available on the relationship between the supplier and the Indian firm but assumed that the parties are related on the presumption that M/s. Instron Holding Limited, UK controls the appellant firm and the supplier firm without any evidence. In this regard, w .....

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India on such goods, the application of the provisions contained under Rule 9(1)(a) is totally misplaced. - However, we also find that even assuming that the parties are related, in order to invoke Section 14 and also Customs Valuation Rules for rejecting the value and the mutuality of interest between the supplier and the appellant has to be established. Whereas, in the present case, we do not find any justification or any evidence for mutuality of interest between the supplier and the app .....

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t the appellant M/s. Instron India Pvt. Ltd., imported components and spare parts for testing quipments from M/s. Instron Limited, UK. The appellant also declared that they are subsidiary of M/s. Instron Holdings Limited, UK and not related to M/s. Instron Limited, UK. The issue was referred to SVB. The DC (SVB) in his order dated 29.05.2003, held that the supplier and the appellants are related to each other under Rule 2 (2) (i) of the Customs Valuation Rules, 1988 (CVR) and ordered to load the .....

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cate appearing on behalf of the appellant reiterates the grounds of appeal and submits that they are 100% subsidiary of M/s. Instron Holdings Limited, UK. Whereas, they have imported components and spare parts from M/s. Instron Limited, UK and the supplier M/s. Instron Limited, UK are not related to the appellant M/s. Instron India Pvt. Ltd. He submits that the SVB order loading the transaction value of spares by 22.66% on the basis that the supplier M/s. Instron Limited, UK and the appellant M/ .....

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he sale of equipment to third party in India. He further submits that the commission is related to the service rendered by the appellant on behalf of the suppliers on the third party imports. He submits that the department holding this commission amount to be added to the transaction value on the ground that the supplier has recovered from the third party and it is flows back to the appellants as commission. He submits that the commission received from the supplier is not includible as it is rec .....

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e authority. He relied on the following case laws:- 1. Mittal International Vs. CC, New Delhi 2002 (145) ELT 667 (Tri.-Del.) 2. Premnath Diesels Pvt. Ltd. Vs. CC, Calcutta 2000 (122) ELT 458 (Tri.) 3. CC, Mumbai Vs. J.D. Orgochem Ltd. 2008 (226) ELT 9 (S.C.) 4. CCE, Mumbai Vs. Fisher Rosemount (India) Ltd. 2001 (134) ELT 321 (S.C.) 5. The Ld. AR on the other hand reiterates the finding of the adjudicating authority and the Commissioner (Appeals). He drew attention to the OIO where it is clearly .....

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ier to 22.66%. He also submits that the case law relied on by the Ld. Advocate were relied before the Commissioner(Appeals) also. He relied on the decision in the case of Hydro Aluminium Extrusion Building Sys.India Pvt. Ltd. Vs. CC, Chennai - 2014 (307) ELT 604 (Tri.-Chen.). 6. We have carefully considered the submissions of both sides and perused the records. The short issue involved in the present appeal relates to loading of transaction value of spares ordered by the DC (SVB) and whether the .....

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ate authority were concluded that the supplier M/s. Instron Limited, UK and the appellant M/s. Instron India Pvt. Ltd. are related to each other. Whereas the appellant contended before the Commissioner (Appeals) itself that they are related only to M/s. Instron Holdings Limited, U.K and they are nowhere connected to M/s. Instron Limited, U.K. directly or indirectly. The fact was accepted by the Commissioner (Appeals) in his OIA. However, we find that the DC (SVB) while determining the relationsh .....

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discounts they enjoyed. This admittedly confirms that the commission amount received from their foreign supplier is towards the service rendered by the appellant in India on third party imports. We also find that the appellate authority has not brought out any clear findings on the relationship between the appellant and the foreign supplier. In fact, the Commissioner (Appeals) has admitted that there is no detail available on the relationship between the supplier and the Indian firm but assumed .....

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merit in the contentions raised by the appellant. The appellant is an indenting agent of the foreign company working under the terms of Indenting Agent Agreement. In terms of the above agreement the appellant was not receiving the commission of 15% in relation to the imports made by it directly from M/s. Frimont on a principal to principal basis. It is entitled to 15% commission only in respect of imports made by other parties. It is pointed out that 99% of the imports were its own imports from .....

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this case would clearly show that the appointment of the appellant as agent does not make it a related person of the supplier. The terms of the agreement would not establish any mutuality of interest between the parties. Therefore, we are of the view that the finding that the supplier and the appellant are related to each other cannot be sustained. 5. Now coming to Rule 9(1)(a) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, we do not find how the provision is made a .....

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