Inter-unit transfer valuation supported waiver of pre-deposit and stay of recovery where duty demand appeared excessive.

Valuation of copper anodes transferred between two units was examined for pre-deposit and stay purposes. The profit basis claimed for one unit was rejected because the clearance value was not based on an actual sale, while the expenditure figures relied on for the other unit were treated as notional. On that footing, treating the two units together for valuation was regarded as a reasonable approach, and the duty exposure was indicated to be substantially lower than the demand. As the appellant had already made a substantial deposit and offered further security, waiver of the remaining pre-deposit was granted and recovery of the balance duty and penalty was stayed.

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Issues: Whether the appellant was entitled to waiver of deposit of the demanded duty and penalty and stay of recovery pending appeal, in the context of valuation of goods transferred between two units.

Analysis: The demand arose from valuation of copper anodes cleared from one factory to another for further manufacture. The claimed profit basis for one unit was rejected because the clearance value was not based on an actual sale, while the comparable expenditure figures of the other unit were also shown to be notional. On that footing, treating the two units together for valuation purposes was found to be a reasonable approach, and the duty liability was correspondingly indicated to be substantially lower than the amount demanded. The appellant had already deposited a substantial sum and offered further deposit as security, which was accepted as sufficient compliance for interim relief.

Conclusion: Waiver of the remaining pre-deposit was granted and recovery of the balance duty and penalty was stayed, in favour of the appellant.

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