ORDER
Moheb Ali M., Member (T)
1. The application for waiver of pre-deposit of duty and penalties and stay of operation of the order of the Commissioner of Central Excise (Appeals) is filed by M/s. Axion Impex International Ltd. The applicant is a manufacturer of HDPE/FP yarn and ropes under 100% EOU Scheme. He had obtained permission from the Development Commissioner under Para 6.8(b) of the Export Import Policy 2002-07 to clear the yarn into domestic market on payment of appropriate duty. Accordingly, the applicant sold the said yam to his sister concern. The dispute is in regard to the valuation of yarn so sold. The department rejects the value on the ground that the applicant and the buyer are related to each other and therefore the price at which the goods are sold does not represent the transaction value. The Commissioner thereupon proceeded to determine the value under the provisions of Customs Valuation Rules. While doing do, he adopted cost construction method to determine the value under Rule 8 of the Customs Valuation Rules, 1988. He demanded the differential duty and imposed penalties.
2. Heard both sides. In order to solve the disputes that have often arisen in regard to valuation of goods sold by an EOU in the domestic market, the Board, in its Circular No, 23/84-CX.-6 has prescribed certain guidelines. The guidelines clearly suggest that the export value of same or similar goods can be the basis for assessment of goods permitted to be sold in the domestic sale. The applicant has exported yarn manufactured by him to Norway and UAE. The price, at which the goods were exported, is lower than the price indicated in the invoices for the impugned goods. There is no reason as to why the export value should not be accepted in such a situation. The department’s insistence on cost construction method to arrive at the value has no basis, in the light of the fact that the export value of same goods is available and is higher than the price at which the same goods are sold in DTA. The applicant has made out a strong prima facie case for waiver of duty as well as penalty adjudged by the lower authority. We accordingly dispense with the condition of pre-deposit of the same and stay recovery thereof during the currency of the appeal.
(Pronounced in Court)