Commissioner of Customs Vs Enfinity Solar Solutions Pvt. Ltd. (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, heard an appeal filed by the Commissioner of Customs (Appellant-Revenue) against the Respondent-Assessee, M/s Enfinity Solar Solutions Pvt. Ltd. The dispute centered on the validity of value loading—the addition of a percentage to the declared transaction value—on the import of goods such as Solar Panels, Photovoltaic Cables, Solar Power Inverters, and accessories.
Facts of the Import Transaction
The Respondent-assessee imported the goods from two foreign entities: M/s Enfinity N.V., Belgium, and M/s Enfinity Asia Pacific (Trading) Ltd., Hong Kong. Due to the suspected related-party relationship between the Indian importer and its foreign suppliers, a registration was initiated at the Special Valuation Branch (SVB), Custom House, Chennai, under Board’s Circular No. 11/2001, to examine the transactions. During this enquiry period, an Extra Duty Deposit (EDD) ranging from 1% to 5% was ordered to be enhanced on the assessable value.
The facts indicated that the Belgium company, which was the parent company, entered into worldwide contracts with various original suppliers of the imported items and set the price for its subsidiary companies globally. The Hong Kong trading company, considered the real supplier to the Indian company, would then place orders with the original manufacturers, typically in China. The Chinese manufacturer would directly export the goods to India while invoicing the Hong Kong trading company. The Hong Kong company would then issue a back-to-back invoice to the Indian company.
