The excise and customs department has moved the Supreme Court against Reliance Industries Ltd (RIL) for alleged customs duty evasion of around Rs 9.64 crore in 2004-05.
A bench headed by Justice S H Kapadia tagged the petition with another similar one where the revenue department had demanded customs duty of more than Rs 11.65 crore from RIL in 2005.
The case pertains to duty free import of raw materials such as naphtha and petroleum products by Reliance Industries and its subsequent exports at a discounted price? which the department claimed was not the right price for assessing excise duty liability. RIL had given substantial discounts ranging from 20 to 30% to its customers as it ?saves on customs duty on the import of inputs,? additional solicitor-general Gaurab Bannerjee and P Chidananda submitted on behalf of the department, which had challenged the sectoral tribunal Custom Excise & Service Tax Appellate Tribunal?s ruling in favour of RIL in August last year.
They said that the reason for affording such discounts was that Reliance saved customs duty on the import of inputs.
Since the company didn?t provide details for calculation of such benefits, the department equated the discount amount for supply to deemed exporter of customs duty saved on import by the assessee.
The revenue department further contended that such surrendering of advance licence by the customer to the assessee was in the nature of the additional consideration, which would form part of the price of the final products for the purposes of excise duty. It said that the Ambani firm had cleared the goods without determining the correct assessable value which was in violation of the Central Excise Act.
?Section 4(1)… provides that where goods are sold by the assessee, 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 department said.