2011 (4) TMI 375 - AT - Customs

Imported Goods Valuation Dispute: Recycled LDPE Granules Composition

The case involved the valuation of imported goods declared as reprocessed/recycled LDPE Polythene natural granules. The Customs House test report ... Valuation - Reprocessed/recycled LDPE Polythene natural granules made out of washed and cleaned Polythene Scrap - Re-test by CIPET clearly shows that the goods are not entirely reprocessed/recycled LDPE polythene natural granules but mixture of LLDPE & LDPE - The authorities below have followed Platt’s price after giving a discount of 25% on virgin LLDPE and LDPE - In the case of Radhey Shyam Ratanlal v. CC, Mumbai [2009 -TMI - 33416 - SUPREME COURT ], the Apex Court has held that contemporaneous documents like weekly bulletin of spices market indicating higher price, relied upon by the department, can be accepted for the purpose of enhancement of value - No reason to interfere with the order of the Commissioner (Appeals)- Reject the appeal. Issues:1. Valuation of imported goods based on reprocessed/recycled material.2. Application of Platt's price and discount for re-generated polymer.3. Reliance on CIPET re-test results.4. Interpretation of standing order of Chief Commissioner, Mumbai.5. Use of contemporaneous documents for enhancement of value.Valuation of Imported Goods:The case involved the valuation of imported goods declared as reprocessed/recycled LDPE Polythene natural granules. The Customs House test report confirmed the composition of the goods, leading to an adjudication where the unit price was enhanced by the Asst. Commissioner. The Commissioner (Appeals) remanded the issue for retesting at CIPET, emphasizing acceptance of declared value if goods were proven to be made of recycled material. The CIPET re-test revealed a mixture of LLDPE and LDPE, not entirely reprocessed/recycled LDPE polythene granules. The authorities relied on Platt's price and a 25% discount on virgin material, ultimately upholding the enhanced valuation based on the composition of the goods.Application of Platt's Price and Discount:The authorities applied Platt's price as on a specific date, deviating from the contract date due to the absence of evidence supporting the declared value. A 25% discount was allowed for the goods being re-generated polymer. This decision was in line with the standing order of the Chief Commissioner, Mumbai, and the precedent set by the Tribunal in a relevant case. The Tribunal found this approach justified, considering the guidelines and legal precedents, leading to the rejection of the appeal against the enhanced valuation.Reliance on CIPET Re-test Results:The re-testing of the goods at CIPET played a crucial role in determining the composition of the imported goods. The CIPET report highlighted the presence of a mixture of LLDPE and LDPE, contradicting the initial declaration of reprocessed/recycled LDPE polythene granules. This discrepancy influenced the valuation decision and supported the authorities' choice to rely on Platt's price and apply a discount for the nature of the material.Interpretation of Standing Order of Chief Commissioner, Mumbai:The authorities justified their valuation decision by interpreting and applying the standing order of the Chief Commissioner, Mumbai. This interpretation allowed for the enhancement of value based on the composition of the goods, as supported by legal precedents and guidelines. The adherence to the standing order was deemed appropriate in determining the valuation of the imported goods, reinforcing the decision to uphold the enhanced value.Use of Contemporaneous Documents for Enhancement of Value:The Tribunal referenced a Supreme Court judgment and a previous case to support the use of contemporaneous documents, such as the weekly bulletin of the spices market, for enhancing the value of imported goods. This practice was considered acceptable for justifying valuation decisions, especially when there was a lack of evidence supporting the declared value. The reliance on contemporaneous documents further solidified the authorities' approach in determining the enhanced value of the goods, leading to the rejection of the appeal against the valuation decision.This comprehensive analysis of the judgment highlights the key issues surrounding the valuation of imported goods, the application of relevant pricing mechanisms, the significance of re-testing results, the interpretation of legal guidelines, and the use of contemporaneous documents to support valuation decisions.