17 June 2024


Customs, Excise and Service Tax Appellate Tribunal

Ratan Aluminium Recycling Pvt. Ltd. Vs. Principal Commissioner of Customs, Noida Customs Commissionerate




Transaction value has to be accepted as correct assessable value and same cannot be enhanced on basis of NIDB data

As per facts on record, the Appellant is manufacturer of 'Aluminum Ingots and for the said purpose, they imported aluminium dross under the cover of two Bills of Entry. The said Bills of Entries were presented for first check basis along with documents like commercial invoice, packing list, Bill of lading and recoverable aluminium content stated to be around 21-22%.

Based upon reports, the proceedings were initiated against the Appellant by way of issuance of show cause notice proposing enhancement of the assessable value of the goods based upon the calculation of recoverable percentage of aluminium and the prices as reflected in the London Metal Exchange (LME)on the relevant date.

Commissioner vide his impugned order rejected the transaction value declared by the Appellant and enhanced the same in both the entries thus confirming the demand of differential duties in respect of both the bills of entries and imposed penalty.

Revenue has not doubted the correctness and genuineness of the transaction value of the goods. As per the settled law the transaction value is the assessable value unless established to be incorrect. The aluminium content recoverable from the dross cannot be adopted as a reason for enhancing the transaction value, for which sufficient evidences establishing that there was flow back of money from the importer to the supplier of the goods are required. The latest decision of the Hon'ble Supreme Court in the case of C.C.E. & S.T., Noida Vs. Sanjivani Non-Ferrous Trading Pvt. Ltd. has observed that transaction value has to be accepted as correct assessable value and the same cannot be enhanced on the basis of NIDB data.

Enhancement of the value stand done by adopting the value of the prime metal i.e. Aluminium as reflected in London Metal Exchange (LME). The Tribunal in the case of Agarvanshi Aluminium Ltd. Vs. Commissioner of Customs (I) has held that valuation cannot be enhanced based upon LME price. In the present case we note that the appellant has admittedly not imported prime metal and the imported goods are aluminium dross. Enhancement of value based upon the comparison of the value of prime metal, as specified in LME, without first establishing the transaction value to be wrong, is not accordance with the settled law. As such, the enhancement is set aside.

As per proviso of Section 3(11) of the Customs Act, 1962 additional duty of customs is leviable only when article is imported in India and is liable to payment of excise duty. Aluminium dross has been held to be non-excisable item by the Hon'ble Supreme Court in the case of M/s. Hyderabad Industries Vs. Union of India.

As the CVD leviable on imported goods is directly related to duty of excise required to be paid by the Indian manufactured goods and there being no duty of excise on the dross, present Tribunal is of view that, no CVD is leviable on the imported aluminium dross. No justifiable reasons to sustain the impugned order. Appeal allowed.


Commissioner of Central Excise and Service Tax, Noida vs. Sanjivani Non-Ferrous Trading Pvt. Ltd. MANU/SC/1456/2018
, Agarvanshi Aluminium Ltd. vs. Commr. of Cus. (I) MANU/CM/0101/2013
, Hyderabad Industries Ltd. and Anr. vs. Union of India and Ors. MANU/SC/0352/1999

Tags : Demand Penalty Legality

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