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TMI Blog2013 (8) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 (after the filing of the appeal). The stay application in appeal No.C/1932/2012 seeks waiver and stay in respect of the balance amount of duty, penalties etc. 2. In appeal No.C/2027/2012, HP (India) has challenged the following demands:- Customs duty - Rs.36.70 crores Penalty under Section 114A of the Act - Rs.36.70 crores Penalty under Section 114AA of the Act - Rs. 185 crores Redemption fine under Section 125 of the Act - Rs.11.35 crores The assessee has paid the entire amount of duty (Rs.36.70 crores) along with interest (Rs.5.63 crores). They have also deposited 25% of the penalty imposed under Section 114A of the Act, within 30 days of receipt of the impugned order. As these payments are not in dispute, there can be waiver of predeposit and stay of recovery in respect of the penalty imposed under Section 114AA of the Act and the balance amount of penalty imposed under Section 114A of the Act. Further, in respect of the penalties imposed on the four functionaries of the company (appellants in C/2028-2031/2012) under Section 112 of the Act also, waiver and stay can be granted. 3. In Order-In-Original No.2/2012 (impugned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the learned counsel inasmuch as both the orders passed by the Commissioner are found to have elaborately dealt with the substantive issues. At this stage, we must proceed to deal with the stay applications only. 6. After a perusal of the records and hearing both sides, we find that HP (India) is a 100% subsidiary of HP (USA) and is engaged in the business of import and resale of IT products like computers, printers etc. in India. During the period of dispute (29/04/2005 to 19/03/2009), they imported various IT products from overseas HP entities and resold the same to independent buyers in India. The goods in question were imported from HP (Singapore). HP (Singapore) also directly exported identical goods to 3 rd party buyers in India (Indent Sales). For these Indent Sales, HP (India) provided marketing services to HP (Singapore) and also provided post-sale services like warranty in respect of the products sold by HP (Singapore) to independent 3 rd party buyers in India. For such services, HP (India) received a commission from HP (Singapore). Beyond the warranty period, HP (India) also offered Annual Maintenance Service to the end users in India in respect of the HP products. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old the goods in India at any price higher than the declared MRP. The adjudicating authority has not found any retail sale of the goods at a value beyond MRP. The learned Special Consultant has also reiterated the Commissioner's findings on the point. 7. We have considered the submissions. That freight & insurance formed part of the declared CIF value is, apparently, not in dispute. The claim of the importer that they did not sell the goods in retail for any price higher than MRP has not been rebutted either. Therefore, insofar as the additions made to the declared value on account of freight & insurance and in respect of MRP products are concerned, we are of the view that the assessee-appellant has a prima facie case and, hence, it will not be fair to require predeposit of any amount of duty demanded on the basis of such value additions. Against "cum-duty treatment" and "overfunding" also, the assessee has made out a prima facie case and, therefore, no predeposit is required towards these items. 8. However, the position is different with regard to warranty costs, trade discounts and SRFR. The total amount of duty demanded on the basis of value additions towards these three items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supplier. The documents supplied by the importer did not account for any of these discounts. It was also found that certain vital facts and materials required for the correct determination of the assessable value of the goods had not been furnished by the assessee to the Special Valuation Branch (SVB) of the Customs. The learned Commissioner found a systematic and deliberate suppression and misdeclaration of vital facts by the importer and, therefore, proceeded to reopen the assessments already done as per SVB orders passed in 1996, 2002, 2004 and 2007. The Commissioner's order discloses an apparently acceptable reasoning in support of the addition of the trade discounts to the declared value and of the consequential demand of duty of Rs.310 crores. 11. The learned Commissioner also found that, according to HP's policy, the customs value should be inclusive of warranty cost also if the warranty cost formed part of the product cost. Prima facie, the addition of warranty costs to the declared value of the subject goods nullifies the effect of the assessee's departure from HP's own policy. The demand of duty of Rs.50 crores on account of such addition of warranty costs to the decla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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