Customs valuation discounts for post-importation and marketing costs were treated as prima facie admissible for waiver of pre-deposit.

Interpretative Note 2 to Rule 4 of the Customs Valuation Rules, 1988 excludes from assessable value the cost of activities undertaken after importation and activities related to marketing of imported goods. On that basis, discounts claimed for post-importation expenses in India were treated as prima facie admissible, and the additional discount was also regarded as prima facie sustainable in light of tribunal precedent on a new product discount. A prima facie case for waiver of pre-deposit was therefore made out, and pre-deposit of the demanded customs duty was dispensed with pending appeal.

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Issues: Whether the applicants were entitled to waiver of pre-deposit of the demanded customs duty on the footing that the claimed discounts related to post-importation expenses and market-related discounting.

Analysis: Interpretative Note 2 of Rule 4 of the Customs Valuation Rules, 1988 excludes from assessable value the cost of activities undertaken after importation and activities relatable to marketing of the imported goods. On that basis, the claimed 15% discount for post-exportation expenses in India was treated as prima facie admissible. The additional 6% discount was also regarded as prima facie sustainable in light of the cited tribunal precedent dealing with a new product discount.

Conclusion: A prima facie case for waiver of pre-deposit was made out, and pre-deposit of the demanded duty was dispensed with pending the appeals.

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