Pre-deposit waiver on valuation disputes denied where fixed freight and related charges were prima facie includible in transaction value.

Complete waiver of pre-deposit was declined where the fixed freight shown separately in invoices was prima facie not the actual transportation cost contemplated by the valuation rules and could be included in transaction value. The labour and painting charges were also treated as prima facie includible because the repair-work explanation had not been raised earlier and appeared belated. Financial hardship and the unit's sickness did not justify total waiver, although the unit's running condition was considered. Interim protection against recovery was granted subject to deposit within the stipulated time, failing which the appeal would stand dismissed.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit in respect of duty and penalty, and what interim protection should be granted under the pre-deposit provision.

Analysis: The application was considered on the basis of prima facie merits and financial hardship. The amounts recovered towards freight were shown separately in the invoices, but they were fixed transportation charges and not the actual cost of transportation from the place of removal to the place of delivery. Under the amended valuation scheme, only the actual transportation cost was excludible, so the authorities had a prima facie basis to treat the fixed freight as includible in transaction value. The labour and painting charges were also prima facie liable to be included, as the plea that they related to repair work had not been raised earlier and appeared to be an afterthought. The plea based on sickness of the unit was not accepted as a ground for total waiver, though the running condition of the unit was taken into account.

Conclusion: Complete waiver of pre-deposit was declined. Interim stay of recovery was granted on condition of deposit of Rs. 5 lakhs within the stipulated time, failing which the appeal would stand dismissed.

Ratio Decidendi: For pre-deposit relief, fixed freight shown separately in invoices is not excluded where it is not the actual transportation cost contemplated by the valuation rules, and interim waiver may be denied on a prima facie case even where some financial hardship is shown.

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