2015 (3) TMI 116 - AT - Customs

Waiver of pre deposit - Valuation of goods - Penalty Section 112 (a) and read with Section 114A - Held that - Declared price of the imported goods, which are brass items, is less than the value of brass scrap during the period of dispute. This fact casts serious doubts about the declared transaction value. Moreover the imports are from a trader and not from a manufacturer and the invoices regarding the price at which the goods were purchased by the supplier from the manufacturers have not been produced. In view of this, we hold that the appellant have not been able to establish prima facie case in their favour and as such the amount of ₹ 1,16,487/- paid by the appellant during investigation is not sufficient to safeguard the interest of the Revenue. The appellant, therefore, are directed to deposit an amount of ₹ 5,00,000 alongwith appropriate interest in addition the amount already paid by them within a period of six weeks from the date of this order. Compliance is to be reported on 23rd February, 2015. On payment of this amount within the stipulated period, the requirement of balance amount of duty demand, interest thereon and penalty shall stand waived and recovery thereof stayed. - Partial stay granted.

Issues:
- Determination of assessable value based on Customs Valuation Rules
- Burden of proof on the appellant regarding declared transaction value
- Consideration of prima facie case in favor of the appellant
- Stay application for waiver of balance amount of duty demand, interest, and penalty

Analysis:

Issue 1: Determination of assessable value based on Customs Valuation Rules
The case involved the appellant, a manufacturer of brass ball valves and check valves, importing goods at ICD, Loni during a specific period. The Customs Department determined the assessable value of the goods by invoking Rule 8 of the Customs Valuation Rules, considering the tariff value of brass scrap and adding 30% as value addition. The appellant contested this valuation, arguing that the transaction value should be accepted as per Rule 3 of the Customs Valuation Rules, and the Department should have considered contemporaneous import prices of identical or similar goods before resorting to Rule 8. The appellant's contention was that the Department directly applied Rule 8 without following the sequential valuation rules, leading to an incorrect assessment.

Issue 2: Burden of proof on the appellant regarding declared transaction value
The Department found discrepancies in the declared value of the imported goods compared to the price of brass scrap during the relevant period. The burden of proof shifted to the appellant to establish that the declared value represented the actual transaction value. However, the appellant failed to provide sufficient evidence, such as contemporaneous import documents or invoices from manufacturers, to support their declared value. This lack of evidence raised doubts about the accuracy of the declared transaction value, leading to the Department's decision to determine the value under Rule 8 of the Customs Valuation Rules.

Issue 3: Consideration of prima facie case in favor of the appellant
During the proceedings, the appellant argued that they had a strong prima facie case in their favor, and the amount already paid during the investigation should be considered sufficient for the appeal. The appellant requested a waiver of the balance amount of duty demand, interest, and penalty. However, the Department opposed the stay application, emphasizing that the appellant had not discharged the burden of proof regarding the declared value and had failed to establish a prima facie case in their favor. The Tribunal ultimately directed the appellant to deposit a specified amount within a set period to proceed with the appeal process.

Issue 4: Stay application for waiver of balance amount of duty demand, interest, and penalty
After considering arguments from both sides and reviewing the records, the Tribunal found that the appellant had not adequately proven their case or the accuracy of the declared transaction value. As a result, the Tribunal directed the appellant to deposit a specific amount along with interest within a given timeframe. Upon compliance with this directive, the requirement for the balance amount of duty demand, interest, and penalty would be waived, and recovery thereof stayed until further proceedings.

← Previous Next →