Case Law Details
Welspun Corp Ltd Vs C.C.-Mundra (CESTAT Ahmedabad)
Introduction: In the case of Welspun Corp Ltd vs. C.C.-Mundra, before the CESTAT Ahmedabad, the issue at hand was whether a minor variation in the physical weight of HR steel plates compared to the weight mentioned in import documents, based on theoretical weight calculations, warranted an increase in valuation. The department contended that any excess weight should lead to enhanced valuation, resulting in a demand for additional duties. However, the appellant argued that the theoretical weight was universally used for billing and that a slight variation in the physical weight should not affect the declared value.
Analysis: The CESTAT Ahmedabad considered the submissions from both sides and examined the records. The key argument put forth by the appellant was that the theoretical weight of HR steel plates was calculated based on their dimensions (thickness, length, and width) and using the density of steel. It was a common practice in global trade to use theoretical weight for billing purposes. Consequently, minor differences in physical weight were bound to occur due to various factors during transportation and handling.
The tribunal noted that the value of the goods was determined based on the theoretical weight provided in the import documents, and there was no extra consideration for minor variations in physical weight. They found that this was an international practice for calculating the weight of similar goods like HR steel plates.
Additionally, the tribunal referred to a previous judgment in the appellant’s own case (Welspun Crops Ltd vs. Commissioner of Customs Mundra), where a similar issue had been considered. In that judgment, the tribunal had ruled in favor of the appellant, stating that the demand for differential customs duty based on re-computing the assessable value due to alleged undeclared excess weight was not sustainable.
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