2018 (7) TMI 1295 - AT - Customs

Tribunal emphasizes transaction value in customs valuation, sets aside order rejecting based on LME prices.

The Tribunal allowed the appeals filed by the appellant, setting aside the impugned order that rejected the transaction value based on LME prices. The ... Valuation - rejection of transaction value - Comparable goods - import of Zinc Plate from Bangladesh of irregular Shapes and Sizes - Rule 10A of CVR, 1988 - metal content in the goods. Held that:- The appellant purchased the goods from Bangladesh. The metal contents in the goods were declared to be below 90%. Test Report revealed that Metal content/purity varied between 87.2% and 88.3%. The Adjudicating authority discarded the transaction value following the rate of London Metal Exchange (LME) as reliable source in extracting the true value of the metal. It is observed by the Adjudicating authority that LME prices related to Zinc of the highest purity (99.9%) - in the present case the purity of the Zinc is 87.2% and 88.3%. Therefore, the LME price is not comparable with the impugned goods. The Tribunal in the case of Jindal Strips Limited Vs. Commissioner of Customs, New Delhi [2001 (7) TMI 170 - CEGAT, COURT NO. I, NEW DELHI] observed that LME Bulletin Prices cannot be accepted as the basis of value in absence of corroborative evidences of contemporaneous import. The LME price of Zinc having 99.9% purity is not comparable with the imported zinc consignment of less than 90% purity - there is no reason to reject the transaction value as declared by the appellant - appeal allowed - decided in favor of appellant. Issues: Customs Valuation - Rejection of transaction value based on LME pricesIn this case, the appellant imported Zinc Plates from Bangladesh of irregular shapes and sizes. The adjudicating authority rejected the transaction value declared by the appellant and directed to pay differential duty based on the finalization of the assessment. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal. The main issue revolved around the rejection of the transaction value and the reliance on London Metal Exchange (LME) prices by the adjudicating authority.Upon hearing both sides and examining the records, the Tribunal found that the appellant had purchased the goods from Bangladesh with a declared metal content below 90%. The test report indicated metal content/purity ranging between 87.2% and 88.3%. The adjudicating authority rejected the transaction value, citing LME prices for Zinc of the highest purity (99.9%) as a basis for determining the true value of the metal. However, the Tribunal noted that the purity of the Zinc imported by the appellant was significantly lower, making the LME prices not comparable. The Tribunal referred to previous decisions highlighting that LME Bulletin Prices cannot be accepted without corroborative evidence of contemporaneous imports. The Tribunal emphasized the importance of transaction value in the absence of special circumstances, as per Customs Valuation Rules.The Tribunal further cited relevant legal provisions and judicial precedents to support its decision. It highlighted that the transaction value should be accepted unless there are specific reasons to reject it, such as evidence of contemporaneous imports at different prices. The Tribunal emphasized that theoretical prices based on LME Bulletin alone cannot be the sole basis for enhancing the value for assessment. Referring to previous cases, the Tribunal reiterated that LME prices should not be considered without supporting evidence of import prices. Ultimately, the Tribunal concluded that the LME price of Zinc with 99.9% purity was not comparable to the imported zinc with less than 90% purity, leading to the rejection of the impugned order and allowing the appeal.In conclusion, the Tribunal set aside the impugned order and allowed the appeals filed by the appellant. The rejection of the transaction value based on LME prices was deemed unjustified given the differences in purity levels of the imported Zinc, emphasizing the importance of considering relevant factors in customs valuation to ensure a fair and accurate assessment.