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Customs Act: Assessable Value Has To Be Determined On The Basis Of The Price Declared In The Bills Of Entry

In Commissioner of Central Excise and Service Tax, Noida vs. Sanjivani Non-Ferrous Trading Pvt.Ltd.), the authority had rejected the declared value in the Bills of Entry and reassessment was done by increasing the assessable value. The tribunal had set aside the reassessment and the Revenue had approached the apex court.

The Supreme Court held that 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.

The court also explained when such a declared value can be discarded. It observed that 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. 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.

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