2026-VIL-301-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Undervaluation of imported goods - Rejection of declared value under Rule 12 and sequential redetermination under Rules 3 to 9 of CVR, 2007 - The Customs Department issued a Show Cause Notice proposing rejection of the declared value under Rule 12 of the Customs Valuation Rules, 2009, and redetermination of value under Rules 3, 4, and 9 - Whether the Department has discharged its burden of proving the undervaluation of the imported goods – HELD - The Customs Valuation Rules, 2007 prescribe transaction value as the primary basis for valuation under Rule 3(1), subject to Rule 12. Once the proper officer entertains reasonable doubt as to the truth or accuracy of the declared value, Rule 12 is triggered. In the present case, the Department has established a prima facie case of mis-declaration of value through documentary evidence, including email correspondence and account statements. The burden then shifted to the importer to provide a credible explanation, which the importer failed to do. The Department has, therefore, discharged its burden of proving the undervaluation of the goods - The redetermination of the assessable value is upheld the confiscation of goods, fine, and penalty imposed are set aside – The appeal is partly allowed - Issue 2 - Whether the Department can issue a demand under Section 28 of the Customs Act prior to the finalization of provisional assessment – HELD - The assessment of the goods was done provisionally following the orders of the Madras High Court. The penal provisions under Sections 111(m) and 112(a) of the Customs Act are not attracted in such cases. However, the issuance of the Show Cause Notice has not caused any prejudice to the appellant, as the appellant failed to participate in the proceedings for finalization of the assessment - Issue 3: Rejection of demand for cross-examination of witnesses - The Department relied on the statements of certain witnesses whose statements were recorded during the investigation. The appellant requested cross-examination of these witnesses, which was denied by the adjudicating authority - Whether the appellant has a right to cross-examine the witnesses whose statements were relied upon by the Department – HELD - The right to cross-examine a witness is not an absolute right and the assessee must make out a case for cross-examination by providing specific reasons. A blanket request to cross-examine all persons whose statements have been recorded cannot be sustained. In the present case, the appellant did not question the veracity of the data retrieved from the electronic devices and the statements of the appellant themselves corroborated the findings. Therefore, the request for cross-examination was rightly denied and did not cause any prejudice to the appellant - The denial of the request for cross-examination of the witnesses by the appellant is upheld
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