A bench headed by Justice S H Kapadia sought response from Reliance Industries Ltd as to why it should not pay the customs duty as demanded by the Customs and Excise department.

The case pertains to duty free import of raw materials such as naphtha and petroleum products by Reliance Industries Ltd and it subsequent exports at a discounted price — which the department claimed was not the right price for assessing excise duty liability.

Substantial discounts
Reliance Industries Ltd had given substantial discounts ranging from 20 to 30 per cent to its customers as it “saves on customs duty on the import of inputs,” Additional Solicitor General Harin P Raval submitted on behalf the department said, challenging the sectoral tribunal CESTAT’s ruling in favour of Reliance Industries Limited in March.
“Section 4(1)... provides that where goods are sold by the assesse, the value for the purpose of payment of duty shall be the transaction value (and) that where price is not the sole consideration for the sale, the value shall be determined as per Central Excise Valuation Rules, 2000,” the Customs and Excise department said.

According to the department, in this case it would be the aggregate of such value — the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee.