Corporate Law – Custom Duty – Whether the rejection of declared value by assessee basing on imported purchase bills along wiht invocies and purchase orders and enhancement of the same without assigning sufficient reasons/evidence, is valid and correct ?


Hon’ble Mr. Justice Arjan Kumar Sikri 

 COMMISSIONER OF CENTRAL EXCISEAND SERVICE TAX, NOIDA …..APPELLANT(S)VERSUSM/S. SANJIVANI NON-FERROUS TRADINGPVT. LTD. …..RESPONDENT(S)

The respondent had imported various varieties of the said Aluminum scrap and filed Bills of Entry along with invoices and purchase orders in respect therein declaring the transaction value of the imported goods for the purpose of paying custom duty. – The declared value was not accepted by the Assessing Officer who found the same to be low and reassessment was done by increasing the assessable value. -The assessment order passed by the Assessing Officer was challenged by filing appeals before the Commissioner (Appeals), Central Excise and Customs- All these appeals were dismissed.- Challenging the order of the Commissioner (Appeals), the respondent approached the Customs, Excise and Service Tax Appellate Tribunal- the appeals of the respondent were allowed thereby rejecting the enhancement of assessable value by the Revenue. –

Tribunal held that as provided by Section 14 of Customs Act, 1962, the assessable value has to be arrived at on the basis of the price which is actually paid and in a case the price is not sole consideration or if the buyers and sellers are related persons then after establishing that the price is not sole consideration the transaction value can be rejected and taking the other evidences into consideration the assessable value can be arrived at.- Such exercise has not been done in these cases on hand. Therefore, we reject the enhancement of assessable value in respect of the Bills of Entry which are involved in all the appeals being decided and we restore the assessable value as declared by the appellant in said Bills of Entry. –

Apex court dismissed the appeals and confirmed the tribuanl orders by holding that”….It is manifest from the aforeextracted order of the Tribunal that no details of any contemporaneous imports or any other material indicating the price notified by LME had either been referred to by the adjudicating officer in the adjudication order or such material was placed before the Tribunal at the time of hearing of the appeal. The learned counsel for the Revenue has not been able to controvert the said observations by the Tribunal. In that view of the matter no fault can be found with the order passed by the Tribunal setting aside the additional demand created against the assessee.”