COMMISSIONER OF CUSTOMS (IMPORT) Vs. LENZE MECHATRONICS PVT. LTD.
LAWS(CE)-2015-9-2
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on September 07,2015

COMMISSIONER OF CUSTOMS (IMPORT) Appellant
VERSUS
Lenze Mechatronics Pvt. Ltd. Respondents




JUDGEMENT

P.S.PRUTHI - (1.)THIS appeal is filed by Revenue against the impugned Order -in -Appeal dt. 30.4.2010.
(2.)The respondent imports goods from their related person M/s. Lenze Drive System GMBH, Germany. They also import goods from subsidiaries of the Principal located worldwide. There is no dispute that the foreign supplier and the respondent importer are related in terms of Rule 2(2) of the Customs Valuation Rules. The import from the group companies is covered under Sales Promotion Agreements. A pricelist exists at which the goods are supplied by the related supplier to the importers after giving suitable discount. The suppliers also supply the goods to other unrelated customers in India from whom they charge higher prices than the price in the Global Pricelist by 10% to 30%. The contention of respondents is that the difference between the prices charged to third party unrelated buyers and the prices at which they received the goods is paid to them by their Principal as a commission. This commission is paid for the 'after sale' issues such as warranty period servicing, repairing, and replacement of parts. Revenue built its case around a mail dt. 21.7.2006 to the respondent saying that 'all drives electronic or mechanical shall be supplied as per pricelist with 50% discount'. The adjudicating authority in his order referring to statements submitted by the importer observed that the price variation between the prices for importer and unrelated buyers is ranging up to 55%. The price is not uniform to all buyers and therefore price is influenced by the relationship between the buyer and the seller. Accordingly, he rejected the declared invoice value and directed the assessing group to enhance the same to the value at which contemporaneous identical goods are imported by unrelated buyer. He also directed that after expiry of three years period, if no renewal is done by SVB order, the provisional assessment may be done with extra duty equivalent to 55% of the assessable value. The Commissioner (Appeals) set aside the adjudication order both on basis of facts as well as law.
Heard both sides.

(3.)THE Ld. AR vehemently stated that the discount of 55% is not a normal discount. He relied on Oswal Woollen Mills Ltd. Ludhiana v. Assistant Collector of Customs, Bombay and Others : 1984 (18) ELT 203 (Del.), Metal and Alloys Industries v. Collector of Customs : 1989 (40) ELT 207 (Tribunal) in support of his stand. The Ld. Counsel for the respondent drew our attention to the Sales Promotion Agreement between the Principal and the respondent to prove that there is an arrangement for giving commission in respect of sales to other customers. He also drew our attention to the Chart placed at Annexure 3 which is forwarded by the Additional Commissioner of Customs to the Additional Commissioner A.R. CESTAT, Mumbai on 23.7.2015. According to this chart, the variation in prices is much less than 55% in most cases.
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