2014 (3) TMI 757 - AT - Customs

Waiver of pre deposit - Valuation - import from parent company (related person) - case of the Revenue is based on a document called Fragrance Ingredients Business Unit (FIBU) Price List. - appellant contended that FIBU price list and prices for samples cannot be a basis for deciding the value of regular imports which involve large quantities - Held that - pre-deposit of Rs.20 lakhs would be sufficient for admission of the appeal and it is ordered accordingly. We direct the applicant to deposit Rs.20 lakhs within a period of eight weeks from today. Subject to such pre-deposit, there shall be stay on collection of balance dues arising from the impugned order till the pendency of the appeal - Conditional stay granted.

Summary

Issues:
1. Duty demand and penalties on imported goods.
2. Declaration of relevant information to Customs.
3. Admission of appeal based on pre-deposit amount.

Analysis:
1. The judgment involves two applications from the same impugned order where the first applicant, a subsidiary of a foreign company, imported fragrance and flavor components from their parent company abroad. The Customs initially accepted the values declared by the applicants, but later, the Revenue found discrepancies in the information provided. A Show Cause Notice was issued demanding duty on imported goods, resulting in a confirmed duty demand of Rs.3,09,46,559/- along with penalties and interest. A penalty of Rs.25 lakhs was imposed on the second applicant, the Director Finance of the first applicant.

2. The applicants argued that the Revenue's case was based on a document called "Fragrance Ingredients Business Unit" (FIBU) Price List, which they claimed was not the actual price of the goods. They highlighted that prices for samples were higher to discourage small imports and that FIBU prices were not final prices, as there were imports to third parties at lower prices. The applicants contended that FIBU prices and sample prices could not be the basis for determining the value of regular imports involving large quantities, indicating a strong case on merits for admission of the appeal without further pre-deposit.

3. The Revenue opposed the admission without additional pre-deposit, citing a statement from the Director of the second applicant accepting liability of around Rs.1.9 crores for imports made through Chennai. They requested a further deposit of at least Rs.40 lakhs for appeal admission. The applicants clarified that the second applicant's admission was only regarding calculations assuming FIBU prices as a basis, not an acceptance that FIBU prices should be the transaction value.

4. After considering both sides' submissions, the Tribunal ordered a further pre-deposit of Rs.20 lakhs for admission of the appeal. The applicants were directed to deposit this amount within eight weeks, with a stay on the collection of balance dues from the impugned order pending the appeal. Compliance was to be reported by a specified date.

This detailed analysis of the judgment highlights the issues of duty demand and penalties on imported goods, the declaration of relevant information to Customs, and the admission of the appeal based on the pre-deposit amount set by the Tribunal.