2003 (12) TMI 571 - AT - Customs

Summary

Issues:
1. Stay application for waiver of pre-deposit of duty and grant of stay against its adjustment
2. Determination of the assessable value of imported goods between related parties
3. Interpretation of Customs Valuation Rules, 1985 regarding the acceptance of the highest of two alternative values for Customs purposes

Analysis:

1. The stay application was filed to waive the pre-deposit of duty amounting to Rs. 83,73,780 and to grant a stay against its adjustment from the revenue deposit until the final disposal of the appeal. This application arose from the Commissioner (Appeals) setting aside the lower authority's order and allowing the revenue appeal.

2. The case involved the import of second-hand machinery from a sister concern in Indonesia. The Customs department provisionally assessed the goods at a higher value than declared by the importer. The Assistant Commissioner accepted the declared value with a minor difference from the SGS-certified value. The revenue contended that the original values of the goods were not available, and the value should have been determined using the residual method under Rule 8 of the Customs Valuation Rules, resulting in a short levy according to the revenue.

3. The Commissioner (Appeals) upheld the revenue's contention, leading to the application for waiver of pre-deposit. The applicant argued against the adoption of the higher value between the declared value and the depreciated value for assessment, citing a violation of Rule 8(2)(ii) of the Customs Valuation Rules. The Tribunal found that the Commissioner (Appeals) inconsistently applied Rule 4 regarding related party transactions and ruled in favor of the applicant, waiving the pre-deposit of duty and restraining the department from adjusting the differential duty from the revenue deposit.

In conclusion, the Tribunal allowed the stay application, ordering the waiver of the pre-deposit of duty and preventing the adjustment of the differential duty from the revenue deposit. The judgment highlighted the importance of consistent application of Customs Valuation Rules, especially in cases involving related party transactions, to ensure fair assessment of imported goods.