The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the customs duty demand on the undervaluation of plastic granules or flakes of powder on the grounds of the absence of corroborative evidence.
Prakash Parekh, the appellant assessee was located in the Special Economic Zone (SEZ) and engaged in the manufacturing of recycled Plastic granules/ flakes/ agglomerates/ Pallets/Bars/ Powder, and the SEZ units were also permitted to do trading of all items except restricted, prohibited, canalized items and plastics waste and scrap and the assessee classified the goods as plastics stickers which were not restricted.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the Customs Duty demand for the undervaluation of goods and the imposition of penalty.
Vikas Mehta and Rahul Gajera, the counsels for the assessee contended that the SEZ unit and the buyer of the goods are not related merely because one was proprietor concerned and the other was partnership concerned. In a partnership firm, one of the proprietors is the partner, this cannot be the ground to hold that both are related persons.
Also submitted that there was no evidence found to establish that the assessee had undervalued the goods and the value declared by the assessee is correct being a transaction value and no addition can be made.
Sanjay Kumar, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee undervalued the goods and the demand raised was as per the law and liable to be sustained.
The Bench observed that the goods in question are plastic stickers and there was no undervaluation in respect of such goods.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) quashed the Customs duty demand while allowing the appeal filed by the assessee.
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