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Century Metal Recycling Pvt. Ltd. & Anr. v. Union of India & Ors.

Civil Appeal · 2019 INSC 683Decided 17 May 2019
Civil Appeal No. 5011 of 2019
Chief Justice Ranjan Gogoi · Justice Deepak Gupta · Justice Sanjiv Khanna

Background

A company importing aluminium scrap as raw material complained that customs officers at Noida routinely refused to clear shipments at the value declared in the bill of entry, instead pressuring importers to "consent" in writing to a higher valuation fixed by the department, under threat of delay, demurrage, and other charges. The company's writ petition challenging this practice was dismissed by the Allahabad High Court, which held the issue should instead be raised through the statutory appeal process, so the company approached the Supreme Court.

Decision Breakdown

The Supreme Court held that customs authorities cannot discard the transaction value declared in the bill of entry unless they record "certain reasons" under Section 14 of the Customs Act and Rule 12 of the 2007 Valuation Rules, backed by cogent material such as evidence of contemporaneous imports at different prices: a mere "consent letter" extracted under pressure to avoid delay does not validate an otherwise unjustified re-valuation. It found the assessment order in this case flawed because it rejected the declared value without such reasoned justification, and accordingly quashed it by issuing a writ of certiorari. The Court clarified that internal "Valuation Alerts" used by customs for monitoring trends are only guidance and cannot override a case-specific reasoned assessment, and that its ruling does not mean declared values must always be accepted: each case still turns on its own evidence.

Lesson Learnt

An importer's value declaration in a bill of entry is entitled to a presumption of correctness, and customs officials must give specific, evidence-based reasons before rejecting it, pressuring an importer into a "consent" letter to avoid shipment delays is not a lawful substitute for that reasoned process.

Official source (sci.gov.in)View Judgment (PDF)

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