2008 (7) TMI 662 - AT - Customs

Valuation - copper scrap imported by the appellants - Enhancement of value - Held that - the prices in the LME bulletin for prime metal are only indicative and cannot be the sole basis for enhancing the value of copper scrap, particularly when the goods imported are copper scrap and not copper. Further there is no basis for holding that refining charges for refining scrap and conversion of the same to copper bar/rod will be US 150 per MT - LME prices are indicative and cannot be the basis for enhancing the value in the absence of corroborative evidence of contemporaneous imports at higher price - enhancement of the value is not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of declared value of imported copper scrap
2. Loading the value with refining charges and freight for assessment under Customs (Valuation) Rules, 1988
3. Use of LME prices as a basis for enhancing the value
4. Absence of evidence for abnormal discount or reduction from competitive price
5. Comparison of declared price with loaded price
6. Precedents related to LME prices as indicative values

Analysis:
1. The judgment addresses the issue of the authorities rejecting the declared value of copper scrap imported by the appellants and instead loading the value with refining charges and actual freight for assessment under Rule 6 of the Customs (Valuation) Rules, 1988.

2. The Tribunal found that the prices in the LME bulletin for prime metal are only indicative and cannot be the sole basis for enhancing the value of copper scrap, especially when the imported goods are scrap and not copper. There was no basis for assuming a fixed refining charge of US$ 150 per MT, as required by Rule 4(2)(b) of the Valuation Rules.

3. The judgment emphasized that the transaction value of imported goods should be accepted unless there is abnormal discount or reduction from the ordinary competitive price. However, there was no evidence to establish any abnormal discount offered by suppliers for the copper scraps imported by the appellants.

4. It was noted that the price declared by the appellants was only marginally lower than the loaded price, indicating that there was no significant deviation to warrant an increase in the assessed value based on the LME prices alone.

5. Referring to precedents like Drunkey Exports (P) Ltd. v. Commissioner of Customs (Port), Kolkata-I and Commissioner of Customs, Kandla v. Meera Impex, the Tribunal held that LME prices are indicative and cannot be used to enhance the value without corroborative evidence of contemporaneous imports at higher prices. Therefore, the Tribunal set aside the impugned order and allowed the appeal based on this reasoning.