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HP India tax case: Customs Tribunal to reconvene hearing in April

The Customs Tribunal is scheduled to reconvene hearings from April 6 on USD 403 million (about Rs 2,500 crore at current exchange rate) alleged duty evasion case of US-based Hewlett-Packard's (HP) India unit.

New Delhi: The Customs Tribunal is scheduled to reconvene hearings from April 6 on USD 403 million (about Rs 2,500 crore at current exchange rate) alleged duty evasion case of US-based Hewlett-Packard's (HP) India unit.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had earlier rejected HP subsidiary Hewlett-Packard India Sales' (HPI) request to refer the matter to the Commissioner of Customs on procedural grounds.

The issue relates to Commissioner of Customs' (Bangalore) notice to HPI following a Directorate of Revenue Intelligence (DRI) investigation on alleged custom duty evasion in 2008.

In 2010, DRI issued show-cause notices to HPI, its seven then employees and one former employee alleging HPI underpaid customs duties while importing products and spare parts to India. It sought about USD 370 million in duties, plus penalties from HPI.

In April 2012, Bangalore Commissioner of Customs issued order on products-related show cause notice affirming certain duties and penalties against HPI and the individuals for about USD 386 million, Hewlett-Packard (HP) said in a filing with the US Securities and Exchange Commission (SEC) earlier this month.

Separately during the same month, the Commissioner issued an order on the parts-related show cause notice affirming certain duties and penalties against HPI and certain of the named individuals of around USD 17 million, it added.

HPI contested the Commissioner's orders before the Customs Tribunal along with applications for waiver of the pre-deposit of remaining demand amount as a condition for hearing the appeals, the filing said.
The Customs Department also filed cross-appeals before the Customs Tribunal.

In December 2013, HPI filed applications before Customs Tribunal seeking early hearing of appeals as well as an extension of the stay of deposit.

So far HPI has deposited around USD 69 million (about Rs 430 crore at current rate) with the Indian authorities.

In February last year, the application for extension of the stay of deposit by HPI was granted by the Customs Tribunal until disposal of the appeals.

"On October 27, 2014, Customs Tribunal commenced hearings on cross-appeals of the Commissioner's orders. The Customs Tribunal rejected HP's request to remand the matter to the Commissioner on procedural grounds, and is scheduled to reconvene hearings on the merits beginning on April 6, 2015," the filing said.