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2026 Supreme(Online)(CESTAT) 1559
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, P.V. Subba Rao, Technical Member
Shyam Rexin Trading Pvt. Ltd. – Appellant
Versus
Commissioner Of Customs – Respondent
CUSTOMS APPEAL NO. 50197 OF 2024
For the Appellants/Petitioners: L.B. Yadav
For the Respondents: Rajesh Singh
The transaction value of imported goods cannot be rejected under the Customs Valuation Rules unless there is reasonable doubt regarding its accuracy. Furthermore, where re-determination of value is required, authorities must strictly apply the valuation rules and select the lowest contemporaneous value rather than averaging data.
Headnote:(A) Customs Act, 1962 - Section 14, Section 28, Section 111, Section 124, Section 125 - Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - Rule 4, Rule 5, Rule 12 - Rejection of transaction value - The appellate tribunal held that the transaction value of imported goods cannot be rejected under Rule 12 of the Customs Valuation Rules (CVR), 2007, merely based on NIDB data or the failure to produce a manufacturer's invoice, without reasonable doubt about the truth and accuracy of the declared value.
(B) Customs Valuation - Principles - When determining value under Rule 4 or 5 of the CVR, 2007, the adjudicating authority must adopt the lowest of contemporaneous values rather than arbitrarily selecting an average value or ignoring values based on personal assessment of outliers.
Facts of the case:
The appellant imported goods declared as "PVC Coated Fabrics" which were subsequently tested by the Central Revenue Control Laboratory (CRCL) and identified as "Non-Textured Polyester Filament Yarn Fabric with PVC coating". The Commissioner rejected the transaction value due to the absence of the manufacturer's invoice and reliance on NIDB data, leading to a differential duty demand, confiscation of goods, and imposition of fines and penalties.
Findings of Court:
The tribunal found no mis-declaration of the goods, as identifying the material as a specific type of fabric does not contradict the declared description. Furthermore, the tribunal held that failing to provide a manufacturer's invoice is not a valid basis to doubt the transaction value, and the re-determination of value contrary to the valuation rules (by not choosing the lowest value) was legally flawed.
Issues: 1) Whether the declared value was correctly rejected under Rule 12; 2) Whether the re-determination of value was done according to law; 3) Whether confiscation and penalties were justified.
Ratio Decidendi: Transaction value must be accepted unless there is evidence to doubt its truth or accuracy. Re-determination under the Valuation Rules must strictly follow the statutory hierarchy and principles, specifically adopting the lowest contemporaneous value, not arbitrary averages.
Result: Appeal allowed; impugned order set aside.
| Table of Content |
|---|
| 1. summary of facts leading to customs duty re-determination and confiscation order. (Para 1 , 2 , 3 , 4 , 5) |
| 2. summary of opposing contentions regarding valuation and mis-declaration. (Para 6 , 7) |
| 3. court holds transaction value rejection and re-determination method were unlawful. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 4. appellate order setting aside duty demand, penalty, and confiscation. (Para 16 , 17) |
P.V. SUBBA RAO
M/s Shyam Rexin Trading Pvt. Ltd.11. the appellant filed this appeal to assail the order dated 04.12.2023 passed by the Commissioner of Customs, ICD, Patparganj, New Delhi in which he confirmed demand of differential duty of Rs. 46,76,106/- and imposed a fine of Rs. 5,00,000/- and penalty of Rs. 46,76,106/- on the appellant.
2. No show cause notice was issued in this case because the appellant had waived the show cause notice in writing.
3. The appellant imported PVC coated fabrics under seven Bills of Entry dated 02.11.2022 to 07.11.2022 and declared them as PVC coated fabrics. On testing, the Central Revenue Control Laboratory22. CRCL found that they were non-Textured Polyester Filament Yarn Fabric (PVC coating thickness 0.26 – 0.37 mm) which were of higher value.
4. The facts which led to the issue of the impugned order are that, acting of specific intelligence the consignments of goods imported by the appellant under the aforesaid seven Bills of Entry were placed on alert. The importer declared the goods as “PVC Coated Fabrics” and classified them under Customs Tariff Heading33. CTH 5903 and prices ranging from 0.88 US$ to 1.27 US$ per square meter and declared the total assessable value as Rs. 87,72,135/- and the duty as Rs. 32,07,850/-. Samples were drawn in the presence of the importer and the customs broker under a panchnama and sent to CRCL for testing. In all 2730 kg. excess weight found in one container. CRCL test reports confirmed that the goods were non-Textured Polyester Filament Yarn Fabric with PVC coating and not PVC coated fabric as declared. For these reasons, the transaction value was rejected under Rule 12 of Customs Valuation (Determination of Value Goods) Rules, 200744. Valuation Rules and re-determined under Rule 5 of the Valuation Rules.
5. The operative part of the impugned order is as follows :-
(i) I hereby reject the declared values of PVC Coated Fabric imported against the Bills of Entry Nos. 3272505, 3272503, 3272455 all dated 12.11.2022, 3198453 & 3198160 both dated 07.11.2022, 3139380 dated 03.11.2022 & 3131524 dated 02.11.2022 under Rule 12 of CVR, 2007 read with section 14 of the Customs Act, 1962 and order to re-determine the transaction values of PVC coated Fabric of various thickness as detailed in Table D above on the basis of contemporaneous NIDB data under Rule 4/5 of CVR, 2007. Accordingly, the assessable value of the said imported goods is re-determined as Rs. 1,17,77,076/- instead of Rs. 88,72,135/- declared by the importer in the said Bills of Entry.
(ii) I confiscate the goods having re-determined value of Rs. 1,17,77,076/- (Rupees Two Crores Seventeen Lakhs, Seventy Seven Thousand and Seventy Six only), imported under Bill of Entry Nos. 3272505, 3272503, 3272455 all dated 12.11.2022, 3198453 & 3198160 both dated 07.11.2022, 3139380 dated 03.11.2022 & 3131524 dated 02.11.2022 under section 111 (m) of the Customs Act, 1962. However, I give an option to the importer to redeem the same on payment of Redemption Fine of Rs. 5,00,000/- (Rupees Five Lakhs only) under Section 125 of the Customs Act, 1962. Sicne the goods in question have been provisionally released, the redemption fine may be appropriated from the importer.
(iii) I confirm the customs duty of Rs. 79,26,856/- payable on the goods released provisionally against Bills of Entry Nos. 3272505, 3272503, 3272455 all dated 12.11.2022, 3198453 & 3198160 both dated 07.11.2022, 3139380 dated 03.11.2022 & 3131524 dated 02.11.2022. However, since the importer has already paid an a
