The situation has worsened for importers of brass scrap in the country as some parcels of imported brass scrap at ports in the western region are under detention due to the unresolved issue of discrepancy in the valuation of tariff value.

The customs and revenue department has revised the tariff value to $3,252 per tonne on December 31, from $4,082 fixed on December 15, while the supply of brass scrap is available openly at $1,700-$1,800 a tonne in the international market.

In spite of strong presentation made by trade and industry bodies, the customs department issued a fresh notification (No141/2008 (NT) dated December 31, 2008) quoting brass scrap value as $3,252 per tonne which is higher than international price, trade sources said. ?The department is demanding duty payable on the basis of the latest notification which set the tariff value of brass scrap higher than the price of brass scrap available in the international market,? Rohit Mehta, director, Bombay Metal Exchange (BME) , told FE.

Import parcels of more than 500 tonne are under detention and demurrage at Kandla and Nhava Sheva ports for the past two months mainly due to the failure to arrive at a consensus on the discrepancy in the valuation of the tariff value.

?Some importers have cancelled their future consignments and a few have settled transactions by paying penalties,? a local broker said. Importers are awaiting a clarification and a revised tariff value. ?If the custom department fails to take timely action, over 5,000 industrial units in western India may be forced to close down,? sources said. The BME has made several representations and had meetings with the senior officials of the customs department and even met with the Prime Minister regarding the issue of the discrepancy in the valuation of tariff value.

?Despite our requests, the department has not disclosed the mechanism used to derive the tariff value for brass scrap when the price for a virgin metal – copper- is around $3,000 a tonne. Brass scrap is basically alloy of copper (copper + zinc = brass) which contains approximately 60% of copper.

?Since we are more concerned on the fair value of scrap, we need to take at least price discount of 20% – 25% on scrap and even with that calculation the price of brass scrap should not be more than $1,900, the current price in the international market,?Mehta said.

The BME has decided to obtain the details of the operationsl modalities of the government which has resulted in the non resolution of the discrepancies in the valuation of the tariff through the right to information (RTI) route.