STAHL INDIA PVT. LTD. Vs. CC

JUDGEMENT

(1.) This appeal arises from Order -in -Appeal No. C. Cus. No. 666/2000 dated 18.10.2000 by which the Commissioner (Appeals) has ordered for enhancing the value of assessable value by 25% on the invoice value declared by the importer on the ground that the importer is related with the supplier and the valuation has to be done in terms of Rule 2(2)(v) of Customs Valuation Rules, 1988. The invoice price has not been accepted on the ground that appellant and their supplier belong to Zeneca Group of Companies. The appellant set up their manufacturing facility for specialty chemicals in January 1998. Till their manufacturing started, they engaged in marketing Stahl's products in India, by importing the same from their Group companies M/s. Stahl GB, UK. The lower authority found a difference of about 25% in the prices of goods sold to the appellant when compared to other unrelated buyers and, therefore, the prices declared in the invoices of the imported goods were not accepted. There was no contemporaneous imports or raw material by unrelated parties and, therefore, that matter was remanded for de novo consideration.

(2.) On de novo consideration, the original authority dropped the loading of price of 25% of raw material insofar as import of the final product is concerned. The Commissioner confirmed the lower authority's order to load 25% on the invoice value. The Commissioner has noted that importer are 100% subsidiary of M/s. Zeneca of Netherlands which in turn, is a subsidiary of M/s. Zeneca, U.K. The supplier, M/s. Stahl GB, UK is a 100% subsidiary of M/s. Zeneca, UK. In view of the fact that both the supplier and the importer are directly owned 100% subsidies of M/s. Zeneca, UK, hence they were held to be related persons as per the definition under Customs Valuation Rules, 1988. He has noted that as the appellants are doing certain activities: (a) marketing efforts (b) laboratory facilities (c) sales team (d) conducting fairs (e) other overheads for maintaining the sales infrastructure on behalf of the supplier. Therefore, the price was influenced and being related person, the transaction value cannot be accepted. He has rejected the plea that the sales made to M/s. Manjunath Corporation was only to the extent of 15 tonnes and the sales made to the appellant was 80 tonnes and that there was no mutuality of interest between them. He also rejected the plea that the transaction value was at arm's length and not in terms of the factor of appellants being marketing the goods. He also ignored the plea that Interpretative Notes to Rule 4 (2)(f) of Customs Valuation Rules clearly lays down that fact of appellants' carrying on marketing on behalf of the supplier shall not be the cause to reject the transaction value. We also notice that the said provision was also incorporated in GATT Rules. He also ignored the fact that appellant's import was on bulk basis and that the price of the seller was constant throughout and that of distribution to all other distributors throughout the world.

(3.) We have heard Ld. Chartered Accountant, Shri R. Muralidharan for the appellants and Ld. SDR Smt. R. Bhagya Devi for the Revenue.