Transaction Value Is Not The Only Basis For Assessment Of Duty: CESTAT
Mehak Dhiman
18 Feb 2025 10:10 AM
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the transaction value is not the only basis for assessment of the duty. The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “transaction value is not the only basis for assessment of the duty. The Valuation Rules and Section 14 of the Act provide...
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the transaction value is not the only basis for assessment of the duty.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “transaction value is not the only basis for assessment of the duty. The Valuation Rules and Section 14 of the Act provide for rejection of transaction value. When rejecting the transaction value, the customs officer does not modify the transaction value but only rejects it as the assessable value for determination of the duty.”
In this case, the assessee had filed Bill of Entry to clear Copper Scrap Birch/Cliff imported by it from UAE. The assessee self-assessed duty as per the value declared by it. The proper officer asked the assessee to provide material or evidence to justify the value declared by it in the Bill of Entry. But the assessee failed to do so. As a result, the proper officer re-assessed the Bill of Entry as the declared value was lower than the contemporaneous value of the Copper Scrap Birch/Cliff imported during that period.
The Deputy Commissioner rejected the declared value under Rule 12 of the Customs Valuation Rules, 2007. Aggrieved by the Deputy Commissioner, the assessee filed an Appeal before Commissioner (Appeals), who rejected the appeal and upheld the order of the Deputy Commissioner. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal.
The assessee contended that the transaction value in the invoice should have been accepted, and assessment should have been finalized accordingly.
Whereas the Revenue contended that the value of scrap was lower than contemporaneous values for similar scrap, so the proper officer sought justification or evidence from the assessee, but none was provided. Therefore, the proper officer rejected the transaction value under Rule 12 and re-assessed the Bill of Entry based on the value of similar goods.
The Tribunal observed that assessee' claim that there cannot be similar goods in scrap cannot be accepted as scrap is classified as per ISRI standards and different types of copper scrap have been given different names.
The Tribunal stated that in this case, the imported copper scrap is birch/cliff. Copper scrap is globally traded, and it was also imported by the assessee as per ISRI classification. Therefore, copper scrap birch/ cliff as is known in the market is similar to other imported birch/cliff.
“As per the Valuation Rules, it is not necessary to establish the invoice was fake or fabricated in order to reject the transaction value. It is also not necessary to establish that the buyer and seller were related. It is sufficient if the proper officer has reasonable doubt for the transaction value to be rejected under Valuation Rule 12, added the bench.”
In view of the above, the Tribunal dismissed the appeal.
Counsel for Respondent/ Department: Mukesh Kumar Shukla
Case Title: M/s Mittal Appliances Limited V. The Commissioner of Customs
Case Number: Customs Appeal No. 51888 of 2021