2024 (4) TMI 696 - AT - Customs

Valuation of imported goods - Ethylene Vinyl Acetate EVA - rejection of declared value - redetermination of value based on the contemporaneous imports - reliability on the test report of CIPET - correctness of method of re-determination of value - HELD THAT - The test report clearly states that the sample which was tested was from the Bill of Entry in dispute. It also specifies which standard methodology was adopted for testing each of the parameters. CIPET is the premier plastics research and training institute of the country and when it has adopted specific testing methods there are no reason to doubt them. The appellant provided no reasons whatsoever to support its assertion that the method adopted by CIPET was incorrect. The method adopted by CIPET was ASTM E 1131 (TGA method). The appellant says ASTM D 5594-98 was the correct method and it will give the result according to its declaration. ASTM stands for American Society for Testing and Materials which lays down standards for materials as well as testing protocols which are followed world over - there are no reason to believe that the ASTM standard followed by the CIPET is incorrect. Insofar as the other test reports submitted by the appellant are concerned any test report is as good as the sample. For instance if we say blood sugar content is very high we should specify whose blood was drawn and tested and if it was drawn fasting or post prandial. Otherwise the blood sugar levels in the test report mean nothing. Neither of the test reports relied upon by the appellant indicates that the samples which were tested were from the goods imported against the Bill of Entry - Further even if there is one report from the Government laboratory and another from a private party the law laid down by the Supreme Court in Reliance Cellulose is that the test report of the government laboratory cannot be discarded in favour of some private test report - it is held in favour of Revenue and against the appellant insofar as the test report is concerned. Valuation of imported goods - imported EVA was declared to have 18% vinyl acetate but on testing by CIPET was found to contain 22.4% vinyl acetate - HELD THAT - If the assessing officer rejects the transaction value under Rule 12 then the value has to be re-determined under Valuation Rules 4 to 9 - The assessing officer determined the value under Rule 9 observing that the other Rules from 4 to 8 do not apply and therefore determined the assessee value as per the contemporaneous values as per Independent Commodity Intelligence Service (ICIS) data. Learned counsel submits that if contemporaneous values must be considered they must originate from the same area. While its imports were from Saudi Arabia the contemporaneous values adopted were based on the values of imports from other regions - the officer had no choice but to look at the values of EVA with 22% vinyl acetate imported from other countries. After considering all such values he adopted the lowest of such values - there are no infirmity in the determination of the assessable value in this case. The impugned order is upheld - the appeal is dismissed.

Summary

Issues:
The issues involved in this case are the rejection of declared value based on testing of Ethylene Vinyl Acetate (EVA) content, the correctness of the testing method adopted by the Central Institute of Plastics Engineering and Technology (CIPET), and the re-determination of value u/s Customs Valuation Rules.

Testing Method and Test Reports:
The appellant contested the CIPET test report's accuracy, claiming that the method used was incorrect and provided two additional test reports showing lower vinyl acetate content. However, the tribunal upheld the CIPET report, emphasizing its adherence to ASTM standards and dismissing the relevance of the appellant's alternative test reports.

Valuation and Rejection of Declared Value:
The tribunal found that the discrepancy in vinyl acetate content between the declared value and the CIPET test results justified the rejection of the declared value under Rule 12 of the Valuation Rules. It clarified that the rejection of transaction value does not alter the contract between buyer and seller but determines the assessable value for customs duty calculation.

Contemporaneous Value Determination:
After rejecting the declared value, the assessing officer determined the value based on contemporaneous imports data. Despite the appellant's argument that such values should originate from the same area, the officer relied on values from other regions due to the absence of specific data for EVA with 22% vinyl acetate content from Saudi Arabia. The tribunal upheld this determination as valid.

Conclusion:
Ultimately, the tribunal upheld the impugned order, dismissing the appeal and affirming the rejection of the declared value, the correctness of the CIPET test report, and the determination of assessable value based on contemporaneous imports data.