The Hindu Business Line : SC upholds differential pricing in vitamin mix for shrimp feeds

Adani claimed that the mix was bought at $36 per kg, while the Customs Department averred that it was only $8.2 per kg. The dispute was taken to the Commissioner (Appeals) who felt that the claim of the company at $36 was justified on the basis of evidence produced. The Department was not pleased, so the matter went to the Tribunal, where again the ruling went in favour of the company. Aggrieved, the Department knocked the doors of the apex Court to resolve the issue.

There, "Mr Raju Ramachandran, learned Additional Solicitor General strenuously contended that the Appellate Commissioner and the Tribunal erroneously shifted the onus on the Department to establish the value of vitamin mixes imported, by coming to the conclusion that the Department has not established that the evidence produced by the respondents was not creditworthy, thus erroneously shifted the burden on the appellant."

It was also argued on behalf of the Department that the $8.2 per kg price was "based on similar imports made by other parties" and "the publication made by the Marine Product Export Development Authority which indicated what would be the active ingredients in the vitamin mixes".

Mr Justices N. Santosh Hegde, B.N. Agarwal and AR. Lakshmanan of the Supreme Court were of the view that the issue was "one of fact and not involving a question of law" and so required adjudication "on the material produced by the parties".

The court observed: "The Tribunal and the Appellate Authority came to the conclusion that the quality of import of vitamin mixes made by various importers on whose importation value the original authority relied upon, was not of a comparable quality because the chemical composition of such goods widely differed from the chemical composition of goods imported and relied on by the respondent hence, they held it would not be correct to rely upon such incomparable material to fix the disputed valuation." In short, not all vitamin mixes are equal.

The judgment also noted the "wide difference in the use of active ingredients in the products imported". In this context, a material that the Tribunal had relied on was a letter from the MPEDA, which stated: "As regards the concentration/ percentage of vitamin mixes for preparation of shrimps feed, it is difficult to give the exact details... they vary according to the brands/ manufacturer/ feed formulae and types of feed."

The safest material to rely upon would be the actual importation of cost incurred, ruled the court. Therefore, the value fixed by the Commissioner of Appeals was held to be a just value, and the decision went in favour of the company.

May we infer, therefore, that all shrimps need not be equal, because their value would in turn depend on the cost of vitamin mix that went into feeding themwith?

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