2006 (5) TMI 262 - AT - Customs

Valuation - Expert s opinion - Scope of - Test results - Strictures against Chemical Examiner

Summary

Issues: Mis-declaration of value, comparison of goods, assessment of imported zinc, classification of zinc grades, application of Customs Valuation Rules.

In this case, the appellant imported three consignments of zinc declared as 'Re-melted Zinc Ingots'. The goods were provisionally assessed and cleared against bond. Samples were tested, revealing zinc content ranging from 99.4% to 99.6%. A show cause notice alleged mis-declaration of value and proposed to enhance it to 1500 U.S. $ per M.T. The Commissioner rejected the appellant's objections, ordered assessment at the proposed high price, and confiscated the consignment under Section 111(m) of the Customs Act, 1962. Penalties were imposed on the importing firm and its Managing Director. The appellant contended that the comparison with Electrolytic High Grade zinc was incorrect, as the purity levels were different and lower import prices existed. The appellant relied on the Encyclopedia of Chemical Technology to argue that zinc purity affects its grade classification. The chemical examiner's report was challenged, stating that the reference to Chapter headings 7902/72.04 of HSN was irrelevant. The appellant argued that the imports conformed to re-melted zinc ingots based on technical and commercial material. The Commissioner's comparison with Electrolytic High Grade zinc was deemed inappropriate, and errors were highlighted in applying Customs Valuation Rules. The Tribunal set aside the impugned order, allowed the appeals, and criticized the chemical examiner's report for straying from relevant technical material. The Registry was directed to inform higher authorities to ensure proper assessment practices.