Bona fide valuation dispute defeats penalty where duty and interest are paid after the issue is resolved.

Penalty was held unjustified where the dispute concerned only valuation of physician samples, the assessee had adopted a valuation method supported by then-existing judicial views, and later revised the method after the dispute was resolved in line with the applicable rule. Payment of duty with interest after resolution, coupled with the absence of any deliberate intent to evade duty, meant that suppression or evasion could not be established. A coordinate Bench ruling on identical facts was followed, and the penalty was set aside.

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Issues: Whether penalty was leviable for alleged misvaluation of physician samples when the assessee had paid duty with interest after the valuation dispute was settled.

Analysis: The only controversy was the method of valuation of physician samples. The assessee had adopted a valuation method supported by judicial views prevailing at the relevant time and, after the dispute was resolved, revised the method in accordance with the applicable rule and paid the duty with interest. On these facts, there was no deliberate intention to evade duty and no basis to sustain penalty. The reasoning adopted by a coordinate Bench in an identical situation was followed.

Conclusion: Penalty was not leviable and the assessee succeeded on the penalty issue.

Final Conclusion: The appeal was allowed by setting aside the penalty imposed on the assessee.

Ratio Decidendi: Where the dispute is confined to valuation, the assessee acts under a bona fide view supported by existing case law, and duty with interest is paid after the dispute is resolved, penalty for suppression or evasion is not justified.

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