2025-VIL-1948-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Rejection of the transaction value, Duty Demand, Penalties and Confiscation - DRI conducted search and seizure operations and alleged that the appellants had undervalued the imported goods. Based on this, the Commissioner of Customs issued a show cause notice proposing demands of differential customs duty, interest, penalties and confiscation of goods - Whether the Adjudicating Authority was justified in rejecting the transaction value and re-determining the customs duty – HELD - The rejection of the transaction value is not in accordance with the Customs Valuation Rules, 2007. The Department has relied on revised prices of other importers and Petrosil database, which did not represent the contemporaneous import price as per the Valuation Rules. Further, the Department did not follow the procedure prescribed under Rule 12 of the Valuation Rules before rejecting the declared value - The 'reason to doubt' the truth or accuracy of the declared value must be based on 'certain reasons' and not merely on suspicion or apprehension. In the absence of such 'certain reasons', the rejection of the transaction value is set aside and the appeal is allowed - Whether larger period of limitation is invokable in the facts and circumstances of the case – HELD - The Department had re-opened the finally assessed Bills of Entry without conducting a review under Section 129D or filing an appeal. The Tribunal observed that in the absence of any evidence of suppression of facts, the extended period of limitation under Section 28(4) could not be invoked. The Tribunal further noted that most of the Bills of Entry were finally assessed and the goods were released to the appellants, and the Department chose to re-look at the imports after a lapse of 4 years, which was prejudicial to the appellants. Accordingly, the Tribunal set aside the demands on the ground of limitation - Whether the penalties under Sections 112(a), 114A and 114AA imposed on the appellants are sustainable – HELD - Since the liability to confiscation under Section 111 was not proved, the penalty under Section 112 could not be sustained. Further, the penalty under Section 114A was inapplicable to the provisionally assessed Bills of Entry, and the penalty under Section 114AA was imposed without any specific allegation or finding in the show cause notice or the impugned order. Accordingly, the Tribunal set aside all the penalties imposed on the appellants.
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