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Issues:
Five applications for waiver of pre-deposit of duty and penalty imposed on M/s. Uniworth Textiles Ltd. and penalties imposed on M/s. Uniworth International Ltd. Analysis: The main issue in this case revolves around the determination of the assessable value of goods sold by related parties, specifically M/s. Uniworth Textiles Ltd. and M/s. Uniworth International Ltd. The appellant's counsel argued that the duty and penalties were imposed based on the relationship between the two entities, influencing the price of fabrics sold. The appellant contended that Rule 7 of the Customs Valuation Rules, which determines the assessable value based on sales to unrelated parties, should not apply in this case. Instead, they argued that Rule 8 should be applied, considering factors such as invoice price, sale price of similar goods, and export price. The appellant also cited a Board's Circular to support their argument that the invoice price can be accepted for assessment when it corresponds to the FOB value. Additionally, the appellant claimed that the Department did not provide a reasonable opportunity for a hearing before issuing the show cause notice, citing Rule 10A of the Customs Valuation Rules. They relied on a precedent where the Tribunal accepted the FOB value for assessing goods sold in the domestic market by a 100% EOU. On the other hand, the respondent argued that the relationship between the parties did influence the pricing of goods, as evidenced by shareholding and operational control. The respondent contended that the price at which goods were sold by one party should be considered for determining the assessable value. After considering the arguments from both sides, the tribunal found merit in the appellant's contentions. They noted that Rule 7, which applies to sales to unrelated parties, may not be applicable in this case where related parties are involved. The tribunal also highlighted the similarity between the FOB price and the price of goods sold in the DTA, indicating a prima facie case in favor of the appellants. Consequently, the tribunal stayed the recovery of the duty and penalties imposed on all the applicants pending further hearing, scheduled for a later date.
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