COMMISSIONER OF CUSTOMS Vs. HABASIT IAKOTA PVT. LTD.

JUDGEMENT

(1.) HEARD both sides and perused the case records. This a Revenue appeal against the impugned Order -in -Appeal passed by Commissioner (Appeals) under which the Order -in -Original passed by the Assistant Commissioner has been set aside. The facts of the case narrated below are not in dispute.

(2.) M /s. Habasit Holding AG, Switzerland, the foreign supplier holds 51% shares in M/s. Habasit Iakota Pvt. Ltd. the Indian Importer who is the respondents before us. The Swiss Company has two agreements with the respondents "Technical Collaboration Agreement" and "Marketing and Distribution Agreement". On examination of these two agreements and other correspondence, the original authority has come to the conclusion that the Swiss Company and the Indian Company are related. Apart from the fact that the Swiss Habasit holds the controlling share of 51% equity in the Indian Habasit, the former appoints three directors in the Board of the latter with the additional right to nominate a Director of its choice to be the Chairman of the Board with a casting vote. Considering the facts that the supplier Swiss Company has 51% share in the Indian Company and is also in a position to control the Indian Company, we are of the view that the finding of the original authority to the effect that the Swiss Habasit and the Indian Habasit are related cannot be faulted.

(3.) ON comparison, the original authority found that the Swiss Company is allowing a 20% discount to independent buyers, whereas the respondents have been charged a lower price after allowing a 33.3% discount. In other words, the respondents are not being charged 20% towards the cutting and joining charges and in addition they are being given a discount of 33.3% as against 20% to others. Under the circumstances, the original authority cannot be faulted for having come to the conclusion that the price charged to the respondents is influenced by their relationship with the supplier Swiss Company.