9911796707
TMI Blog2011 (3) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... nc ingots and zinc sulphate from the impugned goods. The zinc ingot manufactured is not of the same as prime quality metal for which prices are quoted on London Metal Exchange (LME). 3. Various Terms Relating to the Trade of Zinc Ash/Skimming and Zinc Dross Zinc Ash/Dust/Dross/Skimming are the species of raw material (recyclable waste) for extraction of zinc and also for manufacture of salts of zinc like zinc sulphate. 3.1 Zinc Dross contains the maximum zinc contents, i.e. more than 90% by weight. Zinc dross is produced during the process of galvanization, in fact this is, accumulated drops of zinc metal with other impurities which falls down, when articles dipped into molten zinc are taken out. Some of the molten zinc clinging to the galvanized item fall down and these dropping accumulate to form Zinc Dross. 3.2 Zinc Dust - In some cases, inner lining (lumen) of an item is also to be galvanized e.g. the inner side of the pipe. For this purpose zinc particles are blown inside the pipe and these particles stick to the inner side of the pipe and pipe is galvanized. However, some of these blown zinc particles do not stick to the inner side of the pipe and come out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned goods and continued to produce invoices showing values near such standard value in spite of the fact that international prices for the impugned goods had increased considerably. Sometime in Feb 2006 the Directorate of Revenue Intelligence noticed this suppression of value and initiated investigation against some importers. The imports made by the Appellant also were investigated. DRI made enquiries with Belgium Customs, Consulate General of India in New York, High Commission of India in Singapore and Embassy of India in Brussels which sources gave some evidence suggesting undervaluation of the goods. Investigations conducted locally also unearthed some evidence indicating undervaluation. However the evidences were not sufficiently co-relating with the consignments imported by the Appellants except in 3 Bills of Entries viz. 103021 dated 15-5-04, 105112 dated 28-11-05 and 105111 dated 28-11-05. 6. It is common knowledge that international prices of the impugned goods have a co-relation with the price for zinc metal quoted on LME. But the prices of the goods are also dependent on the content of metallic zinc in the impugned goods and content of zinc in any other f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellants should not be allowed to contest the issue of undervaluation, in Appeal proceedings. 11. After considering arguments on both sides we find that a 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. 12. The formula adopted for confirming the demand is as if 100 tons of zinc skimming is equal to 65 tons of prime metal of zinc, implying that anyone who wants to use 65 tons of prime metal zinc can just buy 100 tons of zinc skimming and use it in substitution. This argument is prima facie absurd. 13. Letter F. No. S/26/Misc-79/2008 Gr-I dated 12-12-2008 addressed to Commissioner of Customs Amritsa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside experts should have been consulted. By simply increasing the number of members of a committee, the reliability of its report cannot increase. Thus the facts that this Tribunal has noticed can briefly be stated as under : (a) There are evidences to show undervaluation of the impugned goods as seen from the fact that the prices declared remained more or less static, irrespective of increase in value of zinc in international market and the fact that in the case of few Bills of Entries undervaluation is proved by acceptable collateral evidence and is accepted by the Appellant. (b) Waste materials by its very nature cannot be of uniform standard and it is difficult to assess its value unless more information about the usable material and the form in which such usable material is present, in the waste are available. (c) While LME prices can be good indicator to detect undervaluation it cannot be a measure for undervaluation of commodities like zinc ash/skimming and zinc dross without taking into account other relevant factors. (d) The department is not having test reports to show the zin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Customs Valuation Rules. If any of such expertise is not available within the department persons outside the department with good standing in the concerned field may be consulted or co-opted in the Committee for checking the data to be submitted by the Appellant. 20. We wish to state that we are making this order following the principle laid down in Rule 9 of the Customs Valuations (Determination Value of Imported Goods) Rules, 2007 and covers pending provisions in the previous rules read with rule 7(3) of the Valuation Rules, 2007 (and corresponding provision in previous rules). Rule 7 reads as under : "7. Deductive value. - (1) Subject to the provisions of rule 3, if the goods being valued or identical or similar imported goods are sold in India, in the condition as imported at or about the time at which the declaration for determination of value is presented, the value of imported goods shall be based on the unit price at which the imported goods or identical or similar imported goods are sold in the greatest aggregate quantity to persons who are not related to the sellers in India, subject to the following deduc tions : - (i) either ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
