'Onus of proving high-seas sale is an international transfer is on importer'

We bought certain goods on the high seas from an unrelated party, who had bought the goods from their parent company abroad and re-sold to us after loading five per cent on the price at which they had bought. Now, can this transaction between us and the high-seas seller be investigated for examining whether the relationship has influenced the price?
CBEC had examined the valuation of goods sold on "high-seas-sales" basis and had issued Circular 32/2004-Customs dated May 11, 2004 [2004 (167) E.L.T. T37], stating that 'taking into account the Advisory Opinion 14.1 of the GATT Valuation Code, which stipulates that if the importer can demonstrate that the immediate sale under consideration took place with a view to export the goods to the country of importation, then such transaction would constitute an international transfer of goods. The later transaction which led to the import would be the relevant transaction for assessment and Rule 4 of Customs Valuation Rules, 1988' (which is now Rule 4 of the 2007 Valuation Rules).

In your case, the last sale that led to imports is the transaction between you and an unrelated party and so, there is no warrant to treat that transaction as a related party transaction. However, the responsibility to prove that the high-seas-sales transaction constituted an international transfer of goods lies with the importer. You would be required to furnish the entire chain of documents, such as original invoice, high-seas-sales contract, details of service charges/commission paid, etc., to establish a link between the first international transfer of goods to the last transaction. In case of doubt regarding the truth or accuracy of the declared value, the department may reject the declared transaction value and follow the sequential methods of valuation under Customs Valuation Rules, 2007.

In the case of our EPCG authorisation (issued in 2011) bearing endorsement allowing fulfilment of 50 per cent export obligation through exports of our group company, is it in-order if the group company fulfils 50 per cent export obligation in the block 1st to 4th year, and the remaining 50 per cent export obligation is fulfilled by us in the block 5th and 6th year?
Para 5.8 of HBP only says that 50 per cent of export obligation must be fulfilled in the first block. How you achieve that is left to you. Therefore, in my opinion, it is in order if you fulfil 50 per cent of the export obligation in the first block through exports of your group-company and the balance through your own exports, later.

Our Excise division changed from Alwar to Jaipur on October 15, 2014. We have furnished UT-1 to Alwar division and we are removing excisable material for exports under the same UT-1 without payment of duty. Can we continue to remove material under the same UT-1 or do we need to furnish fresh UT-1 to Jaipur Division?
As per notification no. 42/2001-CE (NT) dated June 26, 2001, the manufacturer has to furnish UT-1 to the jurisdictional Assistant/Deputy Commissioner of Central Excise. Therefore, you may furnish a fresh UT-1 at the Jaipur Division.

Business Standard invites readers' SME queries related to excise, VAT and exim policy. You can write to us at smechat@bsmail.in