TMI Blog2005 (3) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to 17.83% as the appellants contended that there was an arithmetical mistake in the original authority's order. The appellants have come before this Tribunal contending that the transaction value has to be accepted and there should not be any loading at all. 2. Shri B.V. Kumar, the learned Advocate appeared for the appellants and Smt. Shobha L. Chary, the learned JCDR for Revenue. 3. The appellants, M/s. Gemplus India Private Ltd. (GIPL in short), imported sim cards from their holding company M/s. Gem Plus SA and other related units. The fact that the appellants and the foreign suppliers are related is not in dispute. In view of the above fact, Rule 4(3) of the Customs Valuation Rules, 1988 had to be adopted. Revenue conducted inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's requirement in their premises. After such personalization, the 'Specimen Card' is sent to their Principals in Singapore. Based on the 'Specimen Card', the overseas supplier develops the 'Master' which is shown to the customer in India. After approval by the customer in India, the overseas supplier ships the consignment in accordance with the purchase order. In respect of sim cards imported directly by unrelated buyers, the personalization of cards is carried out by the oversees suppliers at the manufacturing stage itself. In view of the above fact, the cost of personalization of cards directly imported by unrelated buyers is included in the value of the cards imported by them. As such, the price of the cards imported by the unrelated bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the above, it is very clear that the lower authority has not followed correctly Rule 5 of the Valuation Rules in re-determining the assessable value. The learned Advocate relied on the following judgments : (a) Elite Packaging Industries v. CCE - 1992 (60) E.L.T. 311 (T) (b) Punjab Niryat Ayat Pvt. Ltd. v. CC - 1992 (58) E.L.T. 340 (T) (c) Polyvinyl Industrial Corpn. v. CC - 1994 (74) E.L.T. 426 (T) (d) Eicher Tractors Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 321 (S.C.) (vii) The transaction value of the imports made by them as traders/ dealers cannot be compared with the transaction value of the imports made by the actual users. Reliance is placed on the decision in the case of Atco Industries Ltd. v. CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporated in Singapore. There is a collaboration agreement between the appellant (GIPL) and Gem Plus SCA. The collaboration Agreement is for the following purposes :- (i) Personalization of smart cards (software encoding) (ii) Research Development in software for the group (iii) Local production of smart cards, if and when the market shall justify it. As per the collaboration agreement, Gemplus SCA shall provide to GIPL, technical know how and other assistance. There is a Product Supply Agreement between the appellants viz. GIPL and GTA, Singapore. Before undertaking the manufacture of smart cards in India and other related services, GIPL wanted to test the market conditions prevailing in India by importing sim/smart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after deducting the necessary margin, sales tax/octroi and duty. The pricing methodology adopted is based on OECD transfer price Guidelines. Gemplus India takes risk of exchange variation, customs duty risk, receivable risk, direct expenses of salesmen/operations (including Travel and Communication) and other risk of local tax variations on its own account". They have also stated in the questionnaire submitted to the DC, Customs, the methodology of transfer price in the case of the imported products. This method is indicated as Transfer pricing-Priceless method. It is stated that as per this method, the price taken into account is the customer's sales price negotiated by the sales person with the external (non group) customer. A specific m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the quantity of goods being valued. As rightly contended by the appellant, the transaction value of the imports made by them as traders/dealers cannot be compared with the transaction value of the imports made by the actual users. In other words, Commercial levels are not comparable. The Tribunal, in the case of Atco Industries Ltd. v. CC - 1992 (57) E.L.T. 654 (T), held that the transaction value in respect of 24 sets of balances cannot be compared with the invoices pertaining to only one set in applying Rule 5. In the case of Elite Packaging Industries v. CCE - 1992 (60) E.L.T. 311 (T), the Hon'ble Tribunal was concerned with imports by the appellants of 500 MTs. The import price was sought to be confirmed by the department with anothe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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