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Issues: Whether the value of goods cleared by a 100% EOU into the DTA could be enhanced under Rule 8 of the Customs Valuation Rules, 1988, or whether the price realised on DTA sale had to be treated as cum-duty price for working out assessable value and duty.
Analysis: The Board circular relied upon for adopting the enhanced valuation had already been withdrawn. The Tribunal also followed its earlier view that for DTA sales there is no sale for export to India, so the transaction value method under the Customs Valuation Rules cannot be mechanically applied. It further held that the value under the Customs Valuation Rules excludes duties and taxes and, where such levies are not shown separately, the sale price must be treated as cum-duty price and the duty element deducted to arrive at the assessable value. On that basis, the appellant had a strong prima facie case for relief from predeposit.
Conclusion: The demand was not sustained at the predeposit stage and waiver of predeposit with stay of recovery was granted in favour of the appellant.
Ratio Decidendi: For DTA sales by a 100% EOU, where duty is not separately realised and the governing Board circular stands withdrawn, the sale price is to be treated as cum-duty price for determining assessable value under the Customs Valuation Rules.
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