2010 (4) TMI 360 - SC - Customs

Valuation- Department enhanced value of brass and copper scraps relying on price as indicated in London Metal Exchange (LME). Tribunal allowed assessee s appeal observing that assessee not confronted with any contemporaneous material relied by revenue to enhance price. Held that- Tribunal order manifesting that details of any contemporaneous imports or any material indicating price notified by LME neither referred by adjudicating officer nor placed before Tribunal. Revenue not able to controvert Tribunal s observation. No fault in Tribunal order setting aside additional demand.

Summary

Issues:
- Determination of imported goods price based on Transaction value or LME Prices

Analysis:
1. Issue: Determination of imported goods price
- The appeal under Section 130-E of the Customs Act, 1962 raised the question of whether to accept the Transaction value declared by the importer or determine the price of imported goods based on LME Prices.
- The respondent filed Bills of Entry for Brass Scrap and Copper Scrap, cleared at declared invoice values. Subsequently, additional duty was demanded based on LME prices exceeding the declared prices.

2. Facts and Tribunal's decision:
- The Tribunal allowed the appeal, quashing the additional duty demanded from the respondent. The Tribunal noted the lack of contemporaneous material supporting the enhanced prices declared by the revenue.
- The Tribunal emphasized that the assessment based solely on LME Bulletin without corroborative evidence of imports at similar prices was impermissible under the law.

3. Revenue's argument and Supreme Court's decision:
- The revenue contended that the LME bulletin accurately reflected international metal prices, justifying the adoption of prices notified by LME for customs duty determination.
- The Supreme Court, however, disagreed with the revenue's stance. It highlighted the absence of details on contemporaneous imports or materials indicating LME prices in the adjudication order or presented before the Tribunal.
- As the revenue failed to challenge the Tribunal's observations, the Supreme Court upheld the Tribunal's decision to set aside the additional duty demand against the assessee.

4. Conclusion:
- The Supreme Court dismissed the appeal, finding it devoid of merit, and made no order as to costs. The judgment reaffirmed the necessity of providing substantiating evidence for customs duty determination, emphasizing the impermissibility of relying solely on LME prices without supporting material.