2003 (11) TMI 503 - AT - Customs

Summary

Issues:
Waiver of pre-deposit of penalties for undervaluation of imported goods. Contention regarding the description and purity of the imported goods compared to contemporaneous imports. Application of valuation rules and comparison with similar imports. Prima facie case for waiver of penalties. Waiver of pre-deposit of differential duty.

Analysis:
The judgment deals with the issue of waiver of pre-deposit of penalties amounting to Rs. 8 lakhs on the importer and Rs. 2 lakhs on its Managing Director for undervaluation of Zinc Ingots imported in December 1998. The penalties were imposed due to undervaluation of the goods, with the declared unit price being rejected and the value loaded by the Commissioner. The applicants argued that the imported goods were not the same as Electrolytic High Grade Zinc and had a purity of 99.97%, seeking waiver of penalties based on this contention.

The contention of the applicants regarding the description and purity of the imported goods compared to contemporaneous imports was opposed by the ld. D.R., who pointed out that the purity of zinc imported by another company at the same time was also 99.97%. The Commissioner had loaded the value based on this similarity, leading to the imposition of penalties. However, the Tribunal noted that Rule 5 of the Valuation Rules stipulates the adoption of the lowest value in such cases, which was not satisfactorily rebutted by the Revenue. Additionally, other importers had brought in similar goods at a lower price than the company used for comparison, indicating inconsistency in valuation.

After hearing both sides, the Tribunal found that the applicants had made a prima facie case for waiver of pre-deposit of penalties. Considering that an amount of Rs. 13,40,000/- had already been voluntarily deposited by the importers during the proceedings, the Tribunal dispensed with the pre-deposit of penalties and stayed the recovery pending the appeals. However, regarding the waiver of pre-deposit of differential duty, no order was passed due to the lack of evidence showing clearance of goods and their status with the Customs authorities, in accordance with Section 129E of the Customs Act, 1962.