Tribunal denies stay for duty recovery due to lack of evidence on zinc ingots' purity claim

The Tribunal dismissed the applicants' stay applications regarding the recovery of duty and penalty imposed under an order due to lack of evidence supporting the claimed purity of zinc ingots imported. While the purity claim lacked direct evidence, the weight declaration discrepancy was upheld based on international trade norms. The applicants were directed to pre-deposit a significant sum within a specified period to stay the recovery of the balance duty and penalty amount, considering the substantial duty evasion resulting from the weight discrepancy.

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Issues: Stay of recovery of duty and penalty imposed under an order, misdeclaration of purity and weight of zinc ingots, evidence of misdeclaration, short payment of special additional duty, correctness of declared weight, international practice of zinc ingots supply weight, pre-deposit amount for duty evasion.

Analysis:
The applicants sought a stay on the recovery of duty and penalty imposed under an order alleging no evidence of misdeclaration of purity of zinc ingots imported by them. They argued that the department failed to produce any evidence supporting the claimed purity of 99.95%. The department's contention was based on imports by other firms from the same exporter, where the purity was found to be 99.95%. However, no direct evidence or seizure was presented in this case to support the purity claim. The weight declaration was also disputed, with the department asserting that the average weight of zinc ingots should be 1 M.T. per bundle, leading to a short payment of duty. The Tribunal found no evidence to support the claimed purity but agreed with the Commissioner's finding on the weight declaration issue.

The Tribunal noted that no samples were taken by customs officers during clearance, and no test reports were provided by the importer to verify the purity claim. Despite this, the declared purity was considered correct prima facie due to lack of evidence. However, the weight declaration discrepancy was upheld by the Tribunal based on international trade norms where zinc ingots are typically supplied in one M.T. bundles. The applicants were directed to pre-deposit a significant sum within a specified period to stay the recovery of the balance duty and penalty amount. The pre-deposit was required due to the substantial duty evasion resulting from the weight declaration discrepancy.

In conclusion, the Tribunal disposed of both stay applications by directing the applicants to pre-deposit a substantial amount within a specified timeframe to stay the recovery of the balance duty and penalty amount. The decision was based on the lack of evidence supporting the purity claim but upholding the weight discrepancy as per international trade norms.

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