2013 (10) TMI 856 - AT - Customs

Demand - Differential duty - LME price - Held that - demands have been confirmed on the basis of publication of mineral and metal review which is a publication and reports of imports of aluminium scrap on various ports in India based on the import data provided by the customs department, the appellant prepared a comparative chart in respect of the imports that has not been considered by the adjudicating authority. In fact the adjudicating authority has to consider the data of the contemporaneous imports of aluminium scrap on various ports as per the worksheet prepared by the appellant which has not been done in this case. Therefore, demand on account of contemporaneous imports is not sustainable. Demand based on the argument that the price of these goods should be fixed at 65% of LME price for zinc is not consistent with laws and common sense. This formula does not take into account the fact that the Appellants were not manufacturing prime metal zinc for which price is quoted on LME. it does not take into account any processing cost or profit margin. It does not take into account the actual contents of zinc in the impugned goods and the form in which such zinc is present. It is also seen that the statement recorded under Section 108 accepts undervaluation of a few consignments only and not all consignments - Following decision of Sonia Overseas Pvt. Ltd. Vs Commissioner of Customs, Amritsar 2011 (3) TMI 1268 - CESTAT, NEW DELHI - Decided in favour of assessee.

Issues Involved:
1. Admissibility of computer printouts as evidence.
2. Demand based on contemporaneous imports.
3. Valuation based on LME price.
4. Allegation of payment over and above the transaction value to the foreign supplier.

Issue-wise Detailed Analysis:

1. Admissibility of Computer Printouts as Evidence:
The appellants argued that the computer printouts recovered from the premises of the indenting agent cannot be relied upon as per Section 138C of the Customs Act, 1962. The Tribunal noted discrepancies in the panchnama, such as the mismatch between the number of CPUs seized and those reported by the Directorate of Forensic Science. The Tribunal emphasized that for computer printouts to be admissible, the conditions specified in Section 138C must be fulfilled. The Tribunal found that these conditions were not met, particularly the requirement under condition 4C. Citing the case of Premier Instruments & Controls Ltd., the Tribunal concluded that the printouts could not be admitted as evidence due to non-fulfillment of statutory conditions.

2. Demand Based on Contemporaneous Imports:
The appellants contended that the value of imports declared in the computer printouts and the bills of entry were higher than the value of contemporaneous imports. The Tribunal noted that the adjudicating authority had not considered the provisions of the Customs Valuation Rules, which require the lowest value to be taken for determining the transaction value. The Tribunal referenced the Bharti Rubber case, which mandates considering the lowest value of contemporaneous imports. The Tribunal found that the adjudicating authority had not properly considered the comparative data prepared by the appellants, thus rendering the demand based on contemporaneous imports unsustainable.

3. Valuation Based on LME Price:
The appellants argued that the valuation based on the LME price for prime metal was inappropriate as they had imported scrap, not prime metal. The Tribunal agreed, noting that the price of scrap cannot be equated with prime metal due to variations in quality and processing costs. The Tribunal cited Sonia Overseas Pvt. Ltd. vs. CC, which held that using LME prices for valuation without considering other relevant factors is not justified. The Tribunal concluded that the demand based on LME prices was unsustainable.

4. Allegation of Payment Over and Above the Transaction Value:
The Tribunal noted that the adjudicating authority had not discussed whether the appellants had paid amounts over and above the transaction value to their foreign supplier. The Tribunal found that this aspect needed further examination by the adjudicating authority. The Tribunal remanded the matter to the adjudicating authority to investigate this issue with independent evidence apart from the computer printouts.

Conclusion:
The Tribunal found that the demands based on computer printouts, contemporaneous imports, and LME prices were unsustainable due to non-compliance with statutory conditions and improper valuation methods. The Tribunal remanded the matter to the adjudicating authority to examine whether the appellants had paid amounts over and above the transaction value to their foreign supplier, directing the authority to pass an order in accordance with the law after giving the appellants an opportunity to present their case. The appeals were disposed of in these terms.

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