Commissioner of Central Excise and Service Tax, Noida vs M/s Sanjivani Non-Ferrous Trading Pvt. Ltd.
Commissioner of Central Excise and Service Tax, Noida vs M/s Sanjivani Non-Ferrous Trading Pvt. Ltd. - Supreme Court Important Judgment 2018 -
On 10th December, 2018, in the case of Commissioner of Central Excise and Service Tax, Noida v. M/s Sanjivani Non-Ferrous Trading Pvt. Ltd. [Civil Appeal Nos. 18300-18305 of 2017], the issue pertaining to transaction value / assessable value in respect of imported goods for purpose of customs duty, came up for consideration. It was held that as per Sections 14(1) and 14(1-A) of the Customs Act, 1962,“the value of any goods chargeable to ad valorem duty is deemed to be the price as referred to in that provision.”
The Supreme Court observed that “Section 14(1) is a deeming provision as it talks of ‘deemed value’ of such goods. Therefore, normally, the Assessing Officer is supposed to act on the basis of price which is actually paid and treat the same as assessable value/transaction value of the goods. This, ordinarily, is the course of action which needs to be followed by the Assessing Officer. This principle of arriving at transaction value to be the assessable value applies. That is also the effect of Rule 3(1) and Rule 4 (1) of the Customs Valuation Rules, namely, the adjudicating authority is bound to accept price actually paid or payable for goods as the transaction value.”
The Court, however, also observed that there are certain exceptions which“are carved out and enumerated in Rule 4(2).”It was held that“as per that provision, the transaction value mentioned in the Bills of Entry can be discarded in case it is found that there are any imports of identical goods or similar goods at a higher price at around the same time or if the buyers and sellers are related to each other.”The Court said that“in order to invoke such a provision it is incumbent upon the Assessing Officer to give reasons as to why the transaction value declared in the Bills of Entry was being rejected; to establish that the price is not the sole consideration; and to give the reasons supported by material on the basis of which the Assessing Officer arrives at his own assessable value.”