In re Arista Networks Limited (CAAR Delhi)
In the case of In re Arista Networks Limited, the Customs Authority for Advance Rulings (CAAR) Delhi addressed the issue of customs valuation for service parts imported by Arista under its Service Support Operations (SSO). The applicant clarified that the imported parts were new, not refurbished, exempting them from Foreign Trade Policy (FTP) restrictions. Since there was no transaction value due to the free replacement policy, CAAR ruled that the customs value could not be determined under Rule 3 of the Customs Valuation Rules, 2007 (CVR). The authority then proceeded through rules 4 to 9, ultimately determining the value under Rule 9 using the Residual Method. This method incorporates the cost of production, general expenses, and profit margins to calculate the value of service parts. CAAR reviewed the applicant’s detailed submissions, including financial data and standard costs, concluding that the Residual Computed Value method was appropriate for determining customs duties on these shipments.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI
M/s. Arista Networks Limited, having office at 70 Sir John Rogerson’s Quay, Dublin 2, Ireland, (hereinafter referred to as “the Applicant/ Arista”) is a private limited company registered in Ireland under Companies Registration Office. The evidence of shareholding pattern is filed along with this application as “Share Holding Pattern” of the Applicant as Annexure-Ill. Memorandum of Association is attached as Annexure-IV and the Articles of Association has been filed with this application as Annexure-V. The Applicant is engaged in manufacturing and supplying various networking and information technology products and associated services worldwide.
