CA Bimal Jain
Transaction 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
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.
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:
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.
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