Case Law Details

Case Name : Richemont India Pvt. Ltd. Vs CC, New Delhi (CESTAT Delhi)
Appeal Number : 2015 (12) TMI 1043
Date of Judgement/Order :
Related Assessment Year :
Courts : All CESTAT (169) CESTAT Delhi (53)

CA Bimal Jain

CA Bimal JainTransaction value of identical goods can be taken as assessable value of imported goods in terms of Rule 4 of the Customs Valuation Rules only after making an adjustment of commercial and comparable effects

Facts:

Richemont India Pvt. Ltd. (“the Appellant”) imported certain watches from Richemont Dubai (FZE) (“the Supplier”) under a Distribution Agreement. The Department rejected the transaction value and alleged that the transaction value declared by the Appellant was not correct since the Supplier was providing the same watches to independent parties at 12.5% higher price than the price charged from the Appellant. The Appellant contended that the expenses incurred on advertisement and sales promotion are post importation expenses and therefore are not includible in the assessable value. Further, the level of import made by the retailer and the Appellant wasn’t comparable as the retailer imported 29 watches to 48 watches per year and imports made by the Appellant amounted to 1859 watches during 2012-13 and 2398 watches in 2013-14.

Held:

The Hon’ble CESTAT, New Delhi relying upon the judgments in the case of Komet Precision Tolls India Pvt. Limited Vs. CC [2009 (245) ELT 737 (Tri. Bang.)] and CC Vs. Hewlett Packard Limited [1999 (108) ELT 221 (Tri. Mad.)], held as under:

  • It is evident that the transaction value has been loaded by 12.5% only in terms of Rule 4 of the Customs Valuation Rules. Therefore, it is not relevant to dwell on the aspect whether the expenses on advertisement and sales promotion etc., incurred by the Appellant are includible in the assessable value in terms of Rule 10 of the Customs Valuation Rules;
  • Rule 4 of the Customs Valuation Rules requires that in applying this Rule, the transaction value of identical goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued shall be used to determine value of imported goods and where no sale referred to in clause (b) of sub-rule (1) is found, the transaction value of identical goods sold at a different commercial level or in different quantities or both is required to be adjusted to take account of the difference attributable to the commercial level or to the quantity or both.

Thus, the Hon’ble CESTAT, New Delhi held that the loading of 12.5% is not sustainable in terms of Rule 4 of the Customs Valuation Rules.

(Author can be reached at Email: bimaljain@hotmail.com)

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