In Brief
Two sister companies—Ispat Industries Limited and Ispat Metallics Industries—jointly procured iron ore pellets. Pellets were transferred between the companies, with one reversing Cenvat credit and issuing debit notes for expenses. The Commissioner treated this as a sale and added debit note amounts to the assessable value. The Tribunal reversed, finding the transaction was a transfer of jointly-procured raw materials, not a sale, and applied the original supplier's invoice value. The Supreme Court upheld the Tribunal, holding that where inputs are transferred (not sold) between related entities, the original supplier's invoice value applies for duty purposes, not transaction value at removal. Post-manufacturing expenses cannot be added to duty assessments.
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