2007 (5) TMI 90 - AT - Customs

Valuation - Revenue contended that price is influenced by the relationship and rejected the declared value - Held that no evidence presented by revenue in support of contention and accordingly set aside

Summary

Issues: Application for waiver of pre-deposit of duty and penalty

In the judgment delivered by the Appellate Tribunal CESTAT, Mumbai, the issue at hand was the application for waiver of pre-deposit of duty amounting to Rs. 9,59,000/- and penalty of Rs. 1,00,000/-. The duty was confirmed due to reassessment and redetermination of the assessable value of ophthalmic lenses manufactured and cleared for DTA sales to a sister concern at a price lower than the export price. The applicants argued that they and their sister concern were not related as per Rule 2(2) of the Customs (Valuation) Rules, 1988, and thus, the transaction value could not be accepted. The Tribunal found merit in the submission that the common directorship between the two companies was not sufficient to establish a relationship influencing the price. Additionally, the export price could not be relied upon for determining the transaction value as per Rule 8 of the Customs (Valuation) Rules, which prohibits using the price of goods for export to a country other than India. Consequently, the Tribunal concluded that a strong prima facie case for waiver existed, and decided to dispense with the pre-deposit of duty and penalty, staying the recovery pending the appeal. The judgment was pronounced in court by Vice-President Jyoti Balasundaram.