CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI.

PRINCIPAL BENCH, COURT NO. I CUSTOMS APPEAL NO. 55134 OF 2023 [Arising out of the Order-in-Original No. 16/COMMR./VC/Sanden Vikas/ICD- PPG/22-23 dated 29/03/2023 passed by The Commissioner of Customs, New Delhi – 110 096.]

M/s Sanden Vikas (India) Pvt. Ltd., ……Appellant Plot No. 65, Sector – 27A, Faridabad, Haryana (121 003).

Versus Commissioner of Customs, ….Respondent ICD, Patparganj, New Delhi – 110 096.

APPEARANCE:

Dr. Prabhat Kumar and Shri Pralabh Mathur, Advocates for the appellant.

Shri Ranjan Prakash and Shri Rajesh Singh, Authorized Representative for the Department CORAM:

HON’BLE JUSTICE MR. DILIP GUPTA, PRESIDENT HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

FINAL ORDER NO. 50795/2026 DATE OF HEARING : 20.01.2026 DATE OF DECISION: 27.04.2026 P.V. SUBBA RAO The order dated 29.3.2023 passed by the Commissioner1 is assailed by M/s. Sanden Vikas (India) Pvt. Ltd.² in which he decided the proposals made in the show cause notice dated 23.7.2020³ covering the Bills of Entry filed in six different customs ports and ICDs by the appellant in this appeal.

1. impugned order

2. Appellant

3. SCN

2. The appellant manufactures compressors and automotive air conditioners and for this purpose, imported various components through different customs stations. Thereafter, a Premises Based Audit (PBA) was conducted by the auditors of the department who found that the appellant had mis- classified 8 goods and had also short paid duty without applying the correct value of the goods. The SCN was issued covering all six customs stations and demanding duty of Rs.77,17,73,714/- from the appellant on account of classification and valuation.

3. The Central Board of Excise and Customs⁴ issued Notification No. 73/2020-Cus(NT) dated 17.8.2020 appointing Commissioner of Customs, ICD, Patparganj as the common adjudicating authority to decide the SCN covering all the six customs stations. The Commissioner passed the impugned order as the common adjudicating authority. He confirmed the demand of only Rs. 6,84,78,504/- and dropped the rest of the demand. There is no appeal by the Revenue against the demand dropped by the Commissioner. This appeal is only against that party of the demand which has been confirmed by the Commissioner.

4. This demand has broadly two components- (a) demand due to dispute regarding valuation; and (b) demand due to dispute regarding classification.

4. CBIC

5. As far as the valuation is concerned, as per section 14 of the Customs Act, 1962⁵, the value of the imported goods shall be the transaction value, i.e., the price paid or payable for delivery at the time and place of importation. Since the place of importation is India, the freight upto the port of importation in India has to be included in the assessable value. This legal position is not in dispute. If the transaction value does not include the freight, this cost has to be added to the transaction value. Sometimes, the cost of freight is not ascertainable from the records. Rule 10 of the Customs Valuation (Determination of value of Imported goods), Rules, 2007 provides that if the freight is not available, 20% of the FOB value should be added as freight. The relevant portion of this Rule is reproduced below:

Rule 10: Costs and services xxxx (2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include -

(a) the cost of transport of the imported goods to the place of importation;

(b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and (c) the cost of insurance :

Provided that -

(i) where the cost of transport referred to in clause (a) is not ascertainable, such cost shall be twenty percent of the free on board value of the goods;

5. Act

(ii) the charges referred to in clause (b) shall b