Valuation (Customs) – Relationship between supplier and importer cannot be a reason for rejecting the transaction value of imported goods

Relationship between supplier and importer only calls for investigation and a burden on the importer to furnish information as required by the investigating officers. There may also be burden on the importer to prove that the relationship has not affected the price. In this case the importer submitted copies of invoices raised by their suppliers to other customers in Germany showing that prices and discounts offered to unrelated buyers in Germany are at par with what is offered to them.

The adjudicating authority did not examine such evidence. No material brought on record to show that the price declared is not the real transaction value. For loading of the value declared, for charging customs duty, the best evidence that Revenue can produce is flow-back of extra consideration. Since the parties are related parties such evidence may not easily be available. But in such cases evidence of imports at higher prices by unrelated buyers will be good evidence. It is also necessary that the evidence on which Revenue is relying should be disclosed to the importer. This has not been done in this case. The reason that the appellant had agreed to loading of value in the past is not a valid reason to continue to load the value declared.

Noted that the finalization of past assessments was done each time without quoting any specific rule of the Valuation Rules to justify the value adopted. Assessments are finalized apparently for the reason that the appellant did not contest in the past. So now that they are contesting the value suggested by Revenue, past assessments by itself cannot form a basis.

For full text please refer the decision of the CESTAT, Principal Bench, New Delhi in the case of Sew-curodrive (I) Pvt. Ltd. Vs. Commissioner of Customs, New Delhi  [2012 (284) E.L.T. 294 (Tri. - Del.)]