2015 (11) TMI 878 - AT - Customs

Valuation - Inclusion of royalty - Extra duty deposit - Held that - As per the Board s guidelines for extra duty deposit is presently kept at 1%. Only when the importer fails to submit complete reply to the questionnaire, the department can order extra duty deposit of 5%. Whereas, in the present case, we find that the appellants were importing the goods from their related overseas suppliers from 2008 and the department consistently accepted the transaction value for the year 2008 and again in 2011 and again in 2014 vide various AC/DC (SVB) OIO s dated 04.06.08, 23.03.2011 and 04.06.2014. In view of the above, we do not find any valid justification in the Order of the Commissioner (Appeals) for ordering 5% of extra duty deposit. Therefore, prima facie appellants made out grounds for stay of the impugned order relating to 5% of extra duty deposit. Accordingly, we direct the department to collect 1% extra duty deposit as per the Board s Circular till the disposal of the appeal. - Decided partly in favour of assessee.

Summary

Issues:
Stay of operation of the Commissioner (Appeals) Order dated 30.01.2015; Assessment of extra duty deposit at 5% by the Commissioner (Appeals).

Stay of Operation of Commissioner (Appeals) Order:
The applicant sought a stay on the operation of the Commissioner (Appeals) Order dated 30.01.2015, which was remanded to the adjudicating authority for fresh consideration. The Revenue appealed against the addition of royalty to the transaction value of imported goods. The Commissioner (Appeals) also ordered the collection of extra duty deposit at 5%, contrary to the Board's Circular No. 11/2001 which specified 1% unless the importer fails to provide complete replies to questionnaires within 30 days. The Tribunal noted that the appellants had consistently imported goods from related overseas suppliers since 2008, and the transaction value had been accepted by the department in previous reviews. Consequently, the Tribunal found no valid justification for the 5% extra duty deposit and directed the department to collect 1% extra duty deposit until the appeal's disposal. The application for stay of the Commissioner (Appeals) Order was allowed on these terms.

This issue involved the interpretation of the Board's Circular regarding the imposition of extra duty deposit and the Commissioner (Appeals)' authority to order such a deposit. The Tribunal analyzed the history of the appellant's transactions with related overseas suppliers and the department's acceptance of the transaction value in previous reviews. The Tribunal concluded that the Commissioner (Appeals) had overstepped by ordering a 5% extra duty deposit, contrary to the guidelines. The decision highlighted the importance of adhering to established procedures and guidelines in imposing financial obligations on importers.

Assessment of Extra Duty Deposit at 5%:
The Commissioner (Appeals) had ordered the adjudicating authority to collect an extra duty deposit of 5% until the issue was finalized. The appellant argued that the department had consistently accepted the transaction value in previous reviews and that the Commissioner (Appeals) had raised a new issue of "Professional and Consultancy Charges" beyond the grounds of appeal. The Tribunal referred to the Board's Circular No. 11/2001, which specified guidelines for the imposition of extra duty deposit. It noted that the 5% deposit could only be ordered if the importer failed to provide complete replies to questionnaires within 30 days. Since the appellants had a history of accepted transaction values and compliance, the Tribunal found no justification for the 5% deposit and directed the department to collect 1% extra duty deposit until the appeal's disposal.

This issue focused on the correctness of the Commissioner (Appeals)' decision to order a 5% extra duty deposit and the appellant's challenge to this order. The Tribunal examined the appellant's compliance history, the grounds of appeal, and the Board's Circular to determine the appropriate deposit amount. By clarifying the guidelines and emphasizing the need for valid justifications in imposing financial obligations, the Tribunal provided a detailed analysis of the issue and set a precedent for future cases involving extra duty deposits.