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Issues: (i) Whether the assessable value of DTA clearances by a 100% export-oriented unit was to be fixed on the basis of the invoice transaction value or by reference to the CIF value of identical imported goods. (ii) Whether, for such DTA clearances during the disputed period, duty was leviable only at 50% of the basic customs duty or on a wider composite duty base.
Issue (i): Whether the assessable value of DTA clearances by a 100% export-oriented unit was to be fixed on the basis of the invoice transaction value or by reference to the CIF value of identical imported goods.
Analysis: The applicable valuation framework treated DTA sales by an EOU as being on par with imports, but the Board's circular accepted invoice value where it represented the true transaction value and the sale was not to related parties or otherwise distorted. On the facts, there was no finding that the sales were to sister concerns, related persons, or that the invoice price did not reflect the true transaction value. In those circumstances, departure from the circular and adoption of the CIF value of allegedly identical imports was not justified.
Conclusion: The adoption of CIF value of imported goods for valuation was not upheld; the invoice transaction value could not be ignored without valid reasons.
Issue (ii): Whether, for such DTA clearances during the disputed period, duty was leviable only at 50% of the basic customs duty or on a wider composite duty base.
Analysis: The duty liability under the relevant notifications governing EOU clearances to DTA had to be read as attracting only 50% of the customs duty actually leviable on like imported goods. Following the Larger Bench view relied upon, the levy was confined to 50% of basic customs duty, and the broader computation adopted in the impugned orders could not be sustained for the entire period as worked out by the authorities.
Conclusion: Duty was required to be recomputed in accordance with the correct notification-based formula, confined to 50% of the basic customs duty.
Final Conclusion: The duty demand could not stand in the form determined below, and the matter required fresh working of duty and consequential relief by the original authority.
Ratio Decidendi: Where an EOU's DTA sales are not shown to involve related-party pricing or an inauthentic invoice value, the declared transaction value cannot be displaced without reasons, and the duty on such clearances is to be computed only according to the governing notification formula.
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