Pradeep Jain - Chartered Accountant

PJ/Case Laws/2009-10/06

CASE LAWS

Service Tax Section:-

Case: - C & CCE, Vapi v/s M/s DNH Spinners

Citation: - 2009-TIOL-1216-CESTAT-AHM

Issue: - Whether Cenvat credit is available on invoices issued in the name of head office?

Brief Facts: - The assessee has taken credit on the invoices which were not in the name of their factory situated at Silvassa but the same were issued in the name of head office at Mumbai. Adjudicating authority confirmed the demand raised by Department to recover the credit taken on such invoices. The Commissioner (A) in appeal set aside the order of adjudicating authority to the extent that credit was not admissible on the said invoices. Department has filed an appeal against that part of the decision of the Commissioner (A).

Appellant’s Contention: - Revenue has contended that credit is not admissible as documents were not in the name of assessee’s factory but were issued in the name of head office at Mumbai.

Respondent’s Contention: - Assessee has contended that credit is admissible to them. It was argued that assessee being the only manufacturing unit, the head office could not fall in the category of input service distributor.

Reasoning of Judgment: - The Tribunal has agreed with the view point of the Commissioner (A) that “In respect of invoices issued in the name of head office, I find that the Board in para 4 of the Circular No. 211/45/96-CX dated 14.05.96 has decided that credit should not be denied where the invoice is in the name of the Registered office/head office provided that the same is endorsed by the Registered office/head office in favour of the appellants. Further the Hon’ble Tribunal has also allowed credit on Bill of Entry issued in the name of the head office in the case of Eveready Inds India Ltd [2007 (219) ELT 333] and Tata Iron & Steel Co. Ltd. [2008 (228) ELT 224]. In this case also the impugned invoices have been endorsed by the head office in the name of the appellants and therefore following the ratio of the above decisions, I hold the credit taken on invoices with endorsement as correct. I also agree with appellant’s (assessee’s) submission that appellants being the only manufacturing unit, the head office could not fall in the category of input service distributor.”

The Tribunal further held that the grounds raised by the department were only technical grounds. There was no dispute that input services were received by the assessee. The substantive benefit cannot be denied on the procedural grounds. The Tribunal held that there was no infirmity with the view adopted by the Commissioner (A).

Decision: - Appeal rejected.

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Case: - Parason Machinery (I) Ltd v/s CCE, Aurangabad

Citation: - 2009-TIOL-1212-CESTAT-MUM

Issue: - Admissibility of Cenvat Credit on Xerox machine maintenance service, photography service, Air Travel & Tourist Taxi Services.

Brief Facts: - Assessee availed Cenvat credit of four services i.e. Xerox machine maintenance and repair service, air travel agent service, tourist taxi service and photography service for the period 2005-06. The Adjudicating Authority disallowed Cenvat credit on the ground that appellant had not been able to provide evidence that these services have bearing in the production or on manufacture. Appellant has challenged this finding of the Adjudicating Authority.

Appellant’s Contention: - Appellant submitted that the said services were availed in connection with the business activities and hence were covered by the inclusive part of the definition of “input service” given under Rule 2 (l) of the Cenvat Credit Rules, 2004. For Xerox machine maintenance and repair service, appellant submits that the Xerox machine was used principally for designing and drawing without which the final product could not be manufactured. The machine was installed and used for taking photocopies of drawing and sketches which were provided to the manufacturing staff. For air travel agent service and tourist taxi service, the appellant submitted that these services were used in connection with the travel of the company personnel for business purposes. In the reply to Show cause notice it was said that these services were used mainly for marketing tours and meetings. For photography service, it was submitted that these services were used to take photographs of manufacturing activity and manufactured goods. The photographs were supplied to customers as part of marketing strategy. The said service should be considered to be covered under advertisement and sales promotion which is expressly covered by the definition of input service.

Respondent’s Contention: - Department contended that the burden is on the assessee to prove that each of the above service meets the requirement of the main part of the definition of “input services”. But the Appellant has not been able to discharge this burden. Department has relied upon the order no. A/227-230/09/SMB/CIV dated 01.06.09 passed by the Tribunal in appeal no. ST/241-244/08 (Vikram Ispat v/s CCE, Raigad).

Reasoning of Judgment: - The Tribunal had in the case of Vikram Ispat v/s CCE, Raigad held that any service to be brought within the ambit of the definition of “input service” should be one which should satisfy the essential requirement contained in the main part of the definition. This requirement is equally applicable to the various items mentioned in the inclusive part of the definition as well. The Tribunal held that the contention of appellant’s with regard to Xerox Xerox machine maintenance and repair service are acceptable and the same have not been successfully rebutted in the order of the adjudicating authority. For air travel agent service and tourist taxi service, the Tribunal held that it is a question of fact to be established by the assessee by adducing documentary evidence that these tours were actually undertaken to promote the marketing of the final product. But the appellant had not done so. For photography service, Tribunal held that the arguments of the appellant are not convincing. Any strategy involving the taking of photographs of the process of manufacture or of the manufactured goods and supplying such photographs to prospective buyers is unknown to the trade. The grounds raised by the appellant are unconventional. Cenvat credit on photography service is not admissible.

In the end, Tribunal held that Cenvat credit is admissible only for Xerox machine maintenance and repair service only. Impugned order of lower authority modified to that extent.

Decision: - Appeal dismissed accordingly.

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Case: - Guljag Industries Ltd & Ors v/s CCE, Jaipur & Anr

Citation: - 2009 (92) RLT 810 (CESTAT-Del.)

Issue: - Who has the authority to make reference to larger bench in case of difference of opinion or contradictory orders on same issue?

Brief Facts: - The issue before the single bench was “whether service tax in relation to the goods transport service received by party during the particular period can be recovered by issuance of show cause notice beyond 3 years thereafter”. The learned single member noted the decisions given by the Tribunals in various cases as well as the decisions of Apex Court in various cases. Thereafter, learned single member thought it appropriate to refer the matter to a larger bench. The President of the Tribunal passed the order accordingly and the matter was placed before the Division Bench. Division Bench referred to the decisions in the cases of BPL Engineering Ltd. v/s CST [2006 (77) RLT 409 (CESTAT-Ban.)] and CCE, Jaipur v/s Mangalam Cement Ltd [2007 (7) STR 673 (Tri.-Del.)] and observed that there are conflicting views expressed by two benches on the relevant issue. Division Bench passed an order directing the registry to place this matter before the President of the Tribunal for constituting three Member Bench to decide the issue.

Reasoning of Judgment: - The judgment given by the Apex Court in the case of Union of India v/s Paras Laminates (P) Ltd [1991 (49) ELT 322 (SC)] and provisions of Section 219C of the Customs Act, 1962 were considered. It has been held that in case of difference of opinion amongst the Members of a bench on an issue, the Bench has to formulate such issue and ask registry to place the matter before the President of the Tribunal to do the needful in terms of Section 129C (5) of the Customs Act, 1962 and Section 86 of the Finance Act, 1994. It is the prerogative of the President either to refer the matter to third Member or constitute a larger Bench in case of such difference of opinion or hear the matter himself and thereafter the majority of the opinion to form the decision. Reference of a matter to larger Bench or a third Member is entirely in the discretion of the President which has to be exercised judiciously.

It has been held that Division Bench or single member bench do not have power to refer the matter directly to a larger Bench. There is no statutory provision or any judicial pronouncement vesting such power in them. Even in cases where the Division Bench is faced with a situation of having two different views given by different benches on the same issue, the Bench facing such an issue has to formulate the issue which is required to be referred to larger Bench and thereupon ask the Registry to place the matter before the president to do the needful.

On the issue raised in the appeal, it was held that the case is required to be placed before the larger bench and the order in this regard is to be passed by the administrative side by the President. Registry directed to place the matter before the President on administrative side.

Decision: - Matter placed before the President for reference to Larger Bench.

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Central Excise Section:-

Case: - Omjai Bhavani Silk Mills (P) Ltd. v/s CCE, C & ST, Hyderabad

Citation: - 2009 (92) RLT 734 (CESTAT-Ban.)

Issue: - Whether interest was payable by the Department on the deposit made during an investigation and for which the proceedings were dropped?

Brief Facts: - Appellants deposited an amount during the course of some investigation by the Department on 27.01.97. Such amount was deposited on the insistence of the Department. Proceedings against the appellant were dropped by the order of Assistant Commissioner vide order dated 31.03.2000. Appellant claimed refund of the advance deposited on 07.08.2000. The claim was rejected on 25.04.01 by the Deputy Commissioner on the ground that the statement given in the course of investigation was not related to the OIO dated 31.03.2000. Later, appellant took credit of the said deposit made in his PLA in February, 2003. Since there was already substantial unspent balance in PLA, after taking credit of the said deposit, appellant filed for refund of entire amount on 10.12.04. The Lower Authority refunded the unspent balance amount but disallowed the refund of said deposit. However, in appeal, the Commissioner (A) directed refund of the said deposit. The refund of said deposit was given on 07.11.06. On the question of interest, the Commissioner (A) observed that the Adjudicating Authority had not given any finding on admissibility or otherwise of interest to the appellant. Therefore, matter was remanded for passing fresh speaking order. In the fresh matter, claim was rejected by the Assistant Commissioner. In appeal, the Commissioner (A) held that appellants are entitled for interest under Section 11BB of the Central Excise Act, 1944. Appellants being aggrieved by the said order have come up in appeal before the Tribunal.

Appellant’s Contention: - Appellant contended that interest provisions under Section 11BB were not applicable to them because the said deposit during an investigation cannot be considered to be any payment towards any duties of excise payable under the Act or Rules made thereunder. At that point there was no provisional assessment or any order directing payment of any duty and factually the deposit was made under coercion.

It was further contended that since the amount deposited and paid was illegally collected, the appellants are entitled to refund from the date of deposit to date of actual payment and it should not be restricted to date of filing refund application. The appellants have relied upon the case of Binjraka Steel Tubes Limited v/s CCE, Hyderabad-III [2007 (83) RLT 404 (CESTAT-Ban.)] in which it was held that when refund is granted in respect of any amount illegally collected, without authority of law, Department is liable to pay interest from the date of payment of duty to the date of actual payment of refund at the rate as notified under Section 11BB of the Central Excise Act.

It was also contended that Section 11B could not be invoked for sanctioning refund since the refund application was admittedly not for refund of any duty paid but was only refund of the deposit. The provisions under Section 11BB could have been applied for the purpose of calculating the interest but that section cannot be employed for restricting the period of claim for interest.

Respondent’s Contention: - Respondent reiterated the impugned order.

Reasoning of the Judgment: - The Tribunal held that after the adjudication order had dropped the proceedings, the said deposit ought to have been refunded to the party even without the authority of law. The refund claim was rejected. Even when the appellant filed for refund of unspent balance amount in PLA which included the said deposit, the said claim was rejected. Even after 4 years, the Department did not bother to ascertain why an amount was deposited by the appellant and also the grounds for not refunding it. Thereafter refund was granted pursuant to the order passed by the Commissioner (A). This is a very clear case where the department has kept the said deposit without any authority of law. Therefore, the time restriction mentioned in Section 11BB would not be applicable in this case. The Tribunal has followed the ratio laid down in the case of Binjraka Steel Tubes Limited v/s CCE, Hyderabad-III and held that interest had to be paid from the date of deposit till the date of payment.

Decision: - Appeal allowed with consequential relief.

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Case: - Hindalco Industries Ltd v/s CCE, Allahabad

Citation: - 2009 (93) RLT 201 (CESTAT-Del.)

Issue: - Whether the Cenvat credit is allowed on quantity of actual receipt of material or the duty charged by supplier is allowed? Whether small variation due to difference in weighing scale is condonable?

Brief Facts: - Appellants are engaged in manufacturing Aluminium and its products. For this they are procuring inputs like C.P. Coke, Hard Pitch, Silicon Metal, Furnace oil and Light Diesel Oil. Appellant weighs the inputs on their weighing scales when they are received in the factory and record is kept of the quantity received. The Central Excise Officers compared the quantity of the said inputs received as mentioned in the invoice and the quantity received in the factory; they found that there was difference between them. Show cause notice was issued demanding Cenvat credit availed during the relevant period. The Adjudicating Authority confirmed the demand alongwith interest. Appeal to the Commissioner (A) was rejected. Appellant have come in appeal before the Tribunal.

Appellant’s Contention: - Appellants clarified that difference in weight could be attributed to difference in the two weighing scales one at the supplier and one at the appellant’s premises. The differences were within the acceptable norms and therefore, the same cannot be attributed as shortage. With regard to inputs in liquid form, it was contended that difference could be due to method adopted for measurement i.e dip reading and also the density of the material in the oil tank also affects the reading. It was also contended that no claim has been made by the Appellants to the suppliers on the ground of short levy. Appellants relied upon the cases of UOI v/s Bhilwara Spinning Ltd [2008 (222) ELT 362 (Raj.)], CCE, Aurangabad v/s Sipta Coated Sales [2000 (125) ELT 578] and P.K.P.N. Spinning Mills v/s CCE [1997 (89) ELT 588].

Respondent’s Contention: - Respondents have re-iterated the findings of the Commissioner (A). It was emphasized that Modvat credit is available to a manufacturer only on the quantity of inputs actually used in or in relation to manufacture. Since in this case some quantity was not received, the Department has correctly denied the Modvat credit on the said quantity.

Reasoning of the Judgment: - The Tribunal held that the short receipt of inputs varied from 0.08% to 0.38%. However, there is no allegation against the appellants that short receipt was due to any mala fide intention like illicit diversion of cenvated inputs for other uses. The shortage could be due to difference in weighing scales used by the supplier and the appellant and in case of liquid inputs due differences in dip reading. The Tribunal held that it is unreasonable to deny modvat credit due to difference in quantity caused by such reasons.

The Tribunal relied upon the judgment in the case of UOI v/s Bhilwara Spinning Ltd. in which it was held that “when there was no diversion of goods covered under the invoices and the entire goods received under the invoices have been put to the intended use by assessee, Cenvat credit cannot be denied on the transit loss which was found to be normal due to evaporation.”

Tribunal held that the Revenue has not been able to prove that the facts of this case are different from the facts in the case of Bhilwara Spinning Ltd. The Tribunal has also relied upon the judgments of the cases cited by the Appellant. Tribunal held that the legal position is clear that Cenvat credit to the extent of full amount of duty shown in the supplier’s invoice is permissible, even if quantity actually received is somewhat short provided the shortage is meager, attributable to difference in weighing scales and/or transit loss due to evaporation in case of liquids and there is no evidence of deliberate illicit diversion.

The Tribunal concluded that since in Appellant’s case shortage of 0.08% to 0.38% is meager and attributable to difference in weighing scales or transit loss in case of LDO/furnace oil and there being no allegation of illicit diversion of cenvated inputs, reversal of Cenvat credit is not to be done. Impugned order set aside.

Decision: - Appeal allowed.

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Case: - Sunflag Filaments Ltd & Anr v/s CCE, Vapi

Citation: - 2009 (93) RLT 171 (CESTAT-Ahmd.)

Issue: - Whether penalty can be imposed for transferring capital goods without reversal of Cenvat credit from one unit to another unit of same manufacturer? Whether the duty is payable on taking excess credit on capital goods? Whether the credit can be taken on inputs purchased for job work?

Brief Facts: - Appellant has three units in Silvassa and Daman. There are 3 issues involved in this case. Firstly, appellants removed capital goods from Unit-I to Unit-II & Unit-III but did not reverse the Cenvat credit taken on such capital goods. Secondly, Appellants have taken excess credit on capital goods purchased by them instead of 50% admissible immediately on receipt of capital goods as per Rules. Thirdly, Unit-III have directly purchased certain inputs for doing jobwork on behalf of Unit-I and availed Cenvat credit on such inputs.

Reasoning of Judgment: - For the first issue, the Tribunal held that if the credit was to be reversed by the Unit-I, the said credit was available to Unit-II & Unit-III to be taken as Cenvat credit. Therefore, the omission to reverse Cenvat credit at the most can be said to be procedural and for this penalty can be imposed but there is no case for demand of duty. The Appellants can reverse the credit and take it in Unit-II and regularize the transaction. The judgment in the cases of M/s Coca Cola India Pvt. Ltd [2007 (213) ELT 490 (SC)], M/s PTC Industries Ltd [2004 (62) RLT 404 (CESTAT-Del.)] and M/s Mafatlal Inds. Ltd [2009 (90) RLT 238 (CESTAT-Ahmd.)] are applicable in this case.

For the second issue, the Tribunal held that the excess credit was taken on 09.01.01 and the 50% credit was to become available to them in the month of April. Therefore, it would be incorrect to demand full amount of duty. The Lower Authorities should have demanded the interest for the period of time during which irregular credit was available. Since no duty was demanded, penalty could not have been imposed u/s 11AC. Accordingly, matter remanded for calculation of interest for the time-period credit was irregularly availed. Penalties imposed under Section 11AC are set aside.

For the third issue, the Tribunal held that the decision of the larger bench in the case of M/s Sterlite Inds. (I) Ltd. [2005 (68) RLT 25 (CESTAT-LB) is applicable to the appellant’s case and accordingly the credit taken by Unit-III has to be held to have been taken properly.

Decision: - Appeal disposed off accordingly.

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Case: - Ganesh Enterprises v/s Commissioner of Central Excise, Ahmedabad

Citation: - 2009 (240) E.L.T. 106 (Tri. - Ahmd)

Issue: - Whether refund can be claimed in case of amount deposited in Government fund by filling blank signed cheque without issuance of SCN and time limit has not expired?

Brief Facts: - Officers themselves filled up the blank signed cheques available at the premises of appellant and deposited them in the Government exchequer. The appellant filed a refund claim which was rejected. No SCN was issued to him, only letter of refund claim prematurely was given.

Appellant’s Contention: - The appellant claimed that the said amount was forcibly deposited by officers by themselves filling blank signed cheques which were kept in factory premises. He contended that cheques were kept for employees for emergency use in his absence. The cheques were forcibly taken away.

Respondent’s Contention: - Respondent contended that the appellant had deposited the amount voluntarily so refund should not be granted to him.

Reasoning of Judgment: - The Tribunal held that the fact that blank cheques were recovered, filled in and paid into the credit of Government has not been specifically denied by the lower authorities. No order-in-original has been passed by the Adjudicating Authority but only letter was sent to appellants intimating them that the refund claim is premature and therefore claim papers are returned. Commissioner (A) has also taken the same stand that since the show cause notice has not been issued and time limit has also not expired, the amount is not refundable. No judicial instances were presented by respondents and decisions cited by the appellant are applicable to their case.

Decision: - Appeal allowed with consequential relief.

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Case: - Manoj Handlooms v/s Commissioner of Central Excise, Chennai

Citation: - 2009 (240) E.L.T. 158 (Tri. - Chennai)

Issue: - Whether refund of unutilised credit can be allowed on the basis of documents other than proof of export?

Brief Facts: - The appellant cleared goods to an EOU against CT -3 certificate. Later on, refund claim of accumulated Cenvat credit was filed on the basis of ARE -3. Refund claim was refused on the ground of absence of necessary proof of exports and non fulfillment of conditions of basic Notification No. 11/2002-CE (NT) dated 01.03.02 issued under Rule 5 of the CCR, 2004.

Appellant’s Contention: - Appellant contend that they are not required to furnish proof of export to earn refund claimed. They had furnished documents evidencing clearances to the EOU in the form of related ARE-3s. Appellants contend that the sole ground on which the assessee’s refund claim has been rejected was that they had not furnished proof of export. They have relied upon the decisions given in the cases of CCE, Surat v/s Shilpa Copper Wire Industries [2008 (226) ELT 228 (Tri.-Ahmd.), Gulshan Prints P. Ltd v/s CCE, Surat [2004 (170) ELT 345 (Tri.-Mumbai)] and CCE, Chandigarh v/s Himachal Wire Industries (P) Ltd [2005 (185) ELT 303 (Tri.-Del)].

Respondent’s Contention: - It was contended that the refund claim was rightly rejected in accordance with legal provisions contained in Rule 5 and Notification No. 11/2002-CE (NT) dated 01.03.02. That the claims made in 2005 relating to clearances in 2003 was clearly barred by limitation prescribed under Section 11B of the Act.

Reasoning of Judgment: - The Tribunal held that clearances to an EOU have to be treated as export and refund of unutilised credit allowed to the assessee as per decision of the Tribunal in Shilpa Copper Wire Industries case. The refund claim was rejected only on the ground that the appellants had not established its entitlement for the amount claimed with particulars of export under bond or under letter of undertaking of the final products. The documents evidencing clearances of final products to EOU should be accepted as proof of export envisaged in clause (6) of the Appendix to the Notification No. 11/02-CE(NT). Appeal is allowed and matter is remanded to re-examine the said objection.

Decision: - Appeal disposed of accordingly.

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Customs Section:-

Case: - Samsung India Electronic Pvt Ltd v/s CC, New Delhi

Citation: - 2009 (93) RLT 209 (CESTAT-Del.)

Issue: - Whether the refund of excess custom duty paid on entire consignment is available when it was split into two consignments by supplier of goods without the knowledge of importer?

Brief Facts: - Appellant imported a consignment of 1200 pieces of LCD panels weighing 2788 Kgs. Four invoices covered the entire consignment. The Freight Forwarder had split the consignment into two and had prepared two house airway bills each for 10 packages weighing 1392 kgs without knowledge of the appellant. Appellant cleared the consignment covered by one house airway bill under Bill of Entry for total 1200 LCD panels. The shortage was found after the consignment reached the factory and was opened. Thereafter, appellant came to know about the splitting of consignments, found the remaining consignment and filed another bill of entry for remaining 600 LCD panels which were cleared on payment of duty. Thereafter, appellants sought refund of excess duty paid under first Bill of Entry. The claim was rejected on the ground that the short shipment was noticed after out of charge order. In appeal, the Commissioner (A) allowed the appeal of the appellant. Department filed appeal before the Tribunal. The matter was remanded for de-novo examination. Commissioner (A) in de-novo proceedings held that this is a case of short shipment and that the same was detected after out of charge order and there was no verification report to that effect from the custodian and the customs. Commissioner (A) upheld the order of the adjudicating authority by relying upon the judgement in the case of Collector of Customs, Madras v/s Guindy Machine Tools Ltd [2004 (171) ELT 474 (Tri-Chennai)]. Appellant has filed this appeal against this order.

Appellant’s Contention: - Appellant contended that this is not a case of short shipment and therefore, the judgment in the case of Collector of Customs, Madras v/s Guindy Machine Tools Ltd was not applicable to them. The supplier had dispatched the whole goods but the same were split into two consignments by the Freight Forwarder. This fact was not known to the Appellant while filing the first Bill of Entry for the whole quantity imported. When the appellant had approached the Customs for amendment of the Bill of Entry, they had advised the appellant to pay duty on the second consignment and file refund claim for excess duty paid. Accordingly they have filed refund which has been wrongly rejected by the Department.

Respondent’s Contention: - Respondent contended that this is a case where short shipment was detected only after out of charge order and therefore, Tribunal’s Judgment in Collector of Customs, Madras v/s Guindy Machine Tools Ltd was applicable. It was emphasized that this was not a case where the goods have been cleared under green channel and there was examination of the consignment in course of which no shortage had not been detected.

Reasoning of Judgment: - After considering the facts as well as the documentary evidence, the Tribunal held that this was not a case of short shipment, where the quantity landed is less than the quantity mentioned in the airway bill, as the entire shipment was shipped by the supplier and had landed by the same aircraft. The root cause of the problem was that the freight forwarder had split the consignment into two without informing the appellant and who had unknowingly filed single bill of entry for the entire consignment when the consignment was only half. Therefore, this is not a case of short payment and the Tribunal’s Judgment in Collector of Customs, Madras v/s Guindy Machine Tools Ltd was not applicable. Appellants were eligible for refund of the excess customs duty paid by them. Impugned order is not sustainable and therefore set aside.

Decision: - Appeal allowed with consequential relief.

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Case: - Comp-U-Max v/s CC (Seaport), Chennai

Citation: - 2009 (93) RLT 216 (CESTAT-Che.)

Issue: - Whether the sale price list prepared by importer for bank loan can be adopted for valuation of imported items?

Brief Facts: - Appellants imported computer products/accessories of Imation Brand from Dubai. The value of the said imported goods was declared by Appellant under a Bill of Entry dated 17.02.01. A floppy was recovered from the office premises of the importer showing price which as per the appellants was for applying for bank loan. Department alleged that the importer had mis-declared the value of goods. The Commissioner of Customs ordered enhancement of value on the basis of price list showing ex-warehouse Singapore prices in price list of M/s Imation Singapore Pvt Ltd and the price adopted in floppy. The imported goods were also confiscated with an option of redemption on payment of fine and penalty was also imposed. Appellant has come in appeal against this order.

Reasoning of Judgment: - The Tribunal held that the prices in the price list of M/s Imation Singapore Pvt Ltd showing ex-warehouse Singapore prices, even after extending discount of 40% in view of large quantities will not be applicable to Imation products imported from Dubai. The price list referred in the floppy which the importers had prepared for the purpose of applying for bank loan cannot also be adopted for arriving at the correct value of the imported goods, as there is no legal provision for adopting such rate/price. Charge of mis-declaration against the appellant does not stand and therefore, impugned order is set aside.

Decision: - Appeal allowed.

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