AO cannot reject transaction value declared in Bills of Entry without giving reasons: SC

Commissioner Of Central Excise And Service Tax Vs M/S. Sanjivani Non-Ferrous Trading Pvt. Ltd. (Supreme Court of India)

Original Authority in its Order-in-Original dated 25/03/2015 passed comments on the ground of writ petition and did not properly examine the evidence available with the department required to be examined for enhancement of assessable value. Further, we find that as held in the case laws stated above and 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.

FULL TEXT OF THE SUPREME COURT JUDGMENT

The issue raised in these appeals pertains to the transaction value/assessable value in respect of imported Aluminum Scrap, which was imported by the respondent herein. The respondent had imported various varieties of the said Aluminum scrap during the period 27^th August, 2013 to 29^th December, 2014 and filed 843 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. Accordingly, the said declared value was rejected and reassessment was done by increasing the assessable value.

2) In a writ petition filed by the respondent in the High Court of Allahabad, on the directions of the High Court directed the Deputy Commissioner of Customs, NOIDA passed a speaking order dated 25^th March, 2015, giving his reasons to reject the transaction value as declared by the respondent and enhancing the same by taking into consideration the value of imported goods, namely, grades of scrap Aluminum contents therein as well as quantum of presence of other metals.

Please become a Premium member. If you are already a Premium member, login here to access the full content.