Assessable value for paper cleared in reel form cannot prima facie include conversion charges for sheet conversion.

Paper cleared in reel form for conversion into sheets was required to be assessed at the time of removal in the form in which it was actually cleared. Because the goods were admittedly sent to job workers in reel form and substantial supplies were also made in reel form at the same price, the proposed addition of the alleged conversion element to the assessable value was not prima facie sustainable. Full waiver of pre-deposit and stay of recovery were therefore granted.

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Issues: Whether the applicant was entitled to full waiver of pre-deposit and stay of recovery in respect of the demand raised on paper cleared in reel form for conversion into sheets.

Analysis: The demand arose from clearances of paper in reel form sent to job workers for conversion into sheet form for ultimate supply. The goods were admittedly cleared to job workers in reel form, and duty was required to be assessed at the time of clearance in the form in which the goods were removed. Since substantial supplies were also being effected in reel form at the same price, the proposed inclusion of the alleged conversion amount in the assessable value was found not to be prima facie sustainable.

Conclusion: The applicant made out a case for full waiver of the dues and stay of recovery.

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