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Issues: Application for waiver of pre-deposit of duty demanded, rejection of invoice price, justification for fixing price of imported goods, payment to a third party, comparison of goods and prices, reliance on contemporary imports, pre-deposit amount determination.
In this case, the applicant sought a waiver of pre-deposit of duty demanded for importing two consignments of cloth from Korea. The classification was under sub-heading 5907.00 of the Customs Tariff Act, with the goods priced at US $ 1.35 per meter. However, it was found that payment was made to a Singapore party, M/s. Vastraco Pte. Ltd., for the shipment from M/s. Kabul Synthetics Co. Ltd., Seoul, Korea. A show cause notice was issued for finalizing the assessment at a higher value of US $ 1.90 per meter, with a demand for differential duty. The penalty proposal was dropped by the adjudicating authority. The main contention was the rejection of the invoice price and fixing the price of imported goods at US $ 1.90 per meter. The applicant argued that there was no justification for suspecting the correct transaction value. However, the Tribunal found that the applicant failed to provide a strong prima facie case. The lack of explanation for making payment to a Singapore party raised doubts, as no material supported the claim that payment instructions came from the exporter. The comparison of goods and prices imported by another entity, M/s. Sales Corporation, Pondichery, was also disputed. The Tribunal considered the quantity of fabrics imported and the payment arrangement to a Singapore party as crucial factors. Relying on a previous decision, the Tribunal noted that the difference in quantity was not significant enough to ignore the imports relied upon in the show cause notice. Therefore, the applicant was directed to deposit a substantial portion of the duty demanded as a pre-deposit, specifically Rs. 5 lakhs within six weeks from the date of the order. The case was scheduled for compliance reporting on 22-3-2002.
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