2012 (10) TMI 461 - AT - Customs

Stay application - Computer networking equipments were imported by the respondent and assessment was sought on the basis of the unit price declared by them Held that - Lower appellate authority has, in fact, allowed deduction to the extent of over 97% on HP listed prices, for which no rhyme or reason is forthcoming - appellate Commissioner s order should be stayed till final disposal of this appeal

Summary

Issues:
Stay of operation of impugned order based on valuation of imported goods and claimed discounts.

Analysis:
The case involved an application by the department seeking a stay on the operation of an order where the Commissioner (Appeals) accepted the declared value of imported computer networking equipment and granted a significant discount based on data from the supplier, HP, USA. The department contended that the discount granted was abnormal and conditional, requiring interference with the decision. The importer's claim for higher discounts was supported by the Commissioner (Appeals), leading to the acceptance of the declared price over the listed price. The department raised concerns regarding the abnormality of the discount, the conditional nature of the sale, and the lack of proof regarding the discount's normalcy compared to other importers.

The respondent, represented by counsel, supported the Commissioner (Appeals)'s decision, arguing that the declared price was a negotiated package and that similar discounts were accepted in previous transactions involving different entities. The Tribunal carefully considered the submissions and found the deduction of over 97% on HP listed prices to be unconscionable and potentially setting a precedent for assessing authorities. The Tribunal noted the absence of evidence supporting the Commissioner (Appeals)'s view and deemed the sale as conditional, warranting a stay on the operation of the order until final disposal of the appeal.

Consequently, the Tribunal granted the department's application for a stay on the appellate Commissioner's order, emphasizing the need for an early disposal of the appeal. The appeal was directed to be listed promptly for further proceedings. The decision highlighted the importance of maintaining consistency in valuation practices and the need to prevent potentially precedent-setting rulings based on unconscionable deductions without adequate international trade practice support.

In conclusion, the Tribunal's judgment focused on the valuation of imported goods, the reasonableness of discounts granted, and the implications of setting precedents in similar cases. The decision to stay the operation of the order reflected the Tribunal's concerns regarding the potential impact on future assessments and the necessity for a thorough review of the valuation methodology applied in the case.