IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CHENNAI Customs Appeal No. 40150 of 2022 (Arising out of Order in Appeal Seaport C. Cus. II No. 20/2022 dated 04.01.2022 passed by the Commissioner of Customs (Appeals – II), Chennai)

M/s. Gyanguru Enterprises Appellant No. 459, Shop No. 8, 1^st Floor Mint Street, Sowcarpet Chennai – 600 079.

Vs.

Commissioner of customs Respondent Chennai II Commissionerate Custom House, 60, Rajaji Salai Chennai – 600 001. APPEARANCE:

Shri A.K. Jayaraj, Advocate for the Appellant Smt. O.M. Reena, Authorized Representative for the Respondent CORAM Hon’ble Shri M. Ajit Kumar, Member (Technical)

Hon’ble Shri Ajayan T.V., Member (Judicial)

FINAL ORDER NO. 40081/2026 Date of Hearing :24.07.2025 Date of Decision: 13.01.2026 Per M. Ajit Kumar, This appeal is filed by the appellant against Order in Appeal Seaport C. Cus. II No. 20/2022 dated 04.01.2022 passed by the Commissioner of Customs (Appeals – II), Chennai (impugned order).

2. Brief facts of the case are that the appellant had imported birthday candle, chocolate gift bag, paper bag badminton rackets, photo frame etc. in 985 cartons from M/s. Jinguan Industrial and Trading Co. Ltd. China. They filed Bill of Entry No. 2704362 dated 04.04.2019 for clearance of the same and declared the value of the goods as USD 16798.33 (CIF). The imported goods were subjected to examination and on examination it was found that certain imported goods required appropriate drug licence under the Drugs and Cosmetics Act for its clearance. The other imported items were permitted to be cleared provisionally by the Ld. Adjudicating Authority. The appellant thereafter based on communications with the overseas supplier sought for re-export of the goods as they have been wrongly dispatched to the appellant herein. After due process of law, the Ld. Adjudicating Authority absolutely confiscated the goods contained in 203 cartons and allowed re-export of the goods on payment of redemption fine of Rs.4.00 lakhs. He confiscated the goods contained in 782 cartons with an option to redeem the goods on payment of fine. The Ld. Authority also demanded differential duty along with interest and imposed penalty under sec. 112(a) and sec. 114AA of the Customs Act, 1962. The bank guarantee of Rs.3,74,126/- was also appropriated towards the liability. The appellant preferred an appeal against the above order and the same was dismissed by the Ld. Commissioner (Appeals). Hence the present appeal.

3. The Ld. Counsel Shri A.K. Jayaraj appeared for the appellant and Smt. O.M. Reena, Ld. Authorized Representative appeared for the respondent.

3.1 Ld. Counsel Shri A.K. Jayaraj submitted on behalf of the appellant that:

i) The subject import made by them was a bulk purchase. As reported in 1989 (44) ELT 202 Ghanshyam Chajra vs. Collector of Customs, it has been held that, “It is a common knowledge in the International as well as in the Inland Trade that purchasers of bulk quantity enjoy a better discount”.

ii) Under valuation must be proved by the department with corroborative evidence. When neither the supplier nor any documents from that side has been examined and marked by the department the order enhancing the value as done by the department has no legs to stand.

iii) It is settled position of law that the transaction value cannot be ignored unless it is shown that there had been clandestine remittance of value in excess of the invoice value and mutuality of interest exists between the suppliers and the importers.

iv) The transaction value of the goods are the price paid or payable. The invoice produced is the proof of the price paid or payable. The department has not produced even one incriminating evidence regarding illegal payment made more than the invoice value v) As per Section 14(1)(a) of the Customs Act for the comparison of value, the goods should be the same in respect of physical characteristics, quality, reputation, Country of origin and timing of import. The Hon'ble Tribunal in the case