Composite sale price covered PVC socket value; duty demand and penalty failed absent proof of clandestine removal.

Duty demand on PVC sockets was unsustainable where the contracts and schedule of rates showed the sockets were supplied with PVC pipes and their value was already included in the composite price on which duty had been paid; the demand was therefore set aside. Penalty could not survive because the alleged resin shortage was explained as natural loss in processing and handling, and clandestine removal was not proved; the penalty was also set aside.

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Issues: Whether duty demand on PVC sockets was sustainable when the sockets were supplied along with PVC pipes under consolidated rate contracts and their value was included in the price on which duty had been paid, and whether penalty could survive in the absence of proof of clandestine removal.

Analysis: The contract terms and schedule of rates showed that the sockets were supplied with the pipes and that the contract price for the pipes included the value of the sockets. On that factual basis, the value of the sockets stood covered by the duty already paid on the composite sale price. The alleged shortage of resin was also explained as arising from natural loss during processing and handling, and clandestine removal was not established.

Conclusion: The duty demand on PVC sockets was not sustainable and was set aside. The penalty was also set aside.

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