2026-VIL-344-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Demand of Customs Duties Jointly or Severally - Import of confectionery items by M/s. Nakshatra International Food Co. (NIFCO) and other IEC holders. Customs duty was demanded jointly and severally from NIFCO, its proprietor and his brothers as well as the other IEC holders - Whether demand of duty from multiple parties is legally valid – HELD – The customs duty can only be demanded from the sole proprietor of the importing firm and not jointly or severally from other persons, as an importer is the person who has filed the bill of entry under section 46 of the Customs Act, 1962. Demanding duty jointly or severally does not arise unless it can be shown that the goods have been imported jointly - The demand of duty from other IEC holders jointly or severally is not legally valid as there is no provision to make multiple persons liable for the same import transaction - The impugned order is set aside in its entirety, and the appeals filed by the assessee-importers and customs brokers are allowed. The Departmental appeals are dismissed - Re-determination of Transaction Value - The adjudicating authority rejected the declared transaction values under Rule 12 of the Customs Valuation Rules, 2007 (CVR) and re-determined the values under Rules 3, 4 and 9 of the CVR - Whether the re-determination of values is in accordance with the CVR – HELD - The adjudicating authority did not comply with the two-step verification process under Rule 12 and did not provide the reasons for rejecting the declared values to the importer. Further, the re-determination under Rule 9 is not valid as the department had disowned the NIDB data of contemporaneous imports, which is a pre-condition for applying Rule 9. The reliance on proforma invoices alone, without any corroborating evidence of contemporaneous imports, is not legally sustainable to re-determine the transaction values - Admissibility of Electronic Evidence - Department relied on electronic evidence in the form of printouts extracted from seized hard disks and emails - Whether the electronic evidence is admissible – HELD - The electronic evidence is not admissible as the Department failed to comply with the mandatory requirements under Section 138C of the Customs Act regarding certification of the electronic evidence. The Tribunal relied on various judicial precedents which have consistently held that non-compliance with the statutory safeguards renders the electronic evidence inadmissible - Admissibility of Statements recorded under Section 108 - Department relied on the statements of the importers recorded under Section 108 of the Customs Act to re-determine the transaction values – HELD - The statements recorded under Section 108 are not admissible as the department did not comply with the requirements of Section 138B of the Customs Act, which mandates examination of the deponent as a witness and providing opportunity of cross-examination. The Tribunal relied on its own precedent in the Geetham Steels case which laid down the detailed procedure to be followed for statements recorded under Section 108 to be considered admissible - Classification of Goods - Department proposed re-classification of certain items like Nata-de-coco fruit juice and Coppo White Coffee - Whether the re-classification is valid – HELD - The onus to prove the correct classification is on the department, and in the absence of any credible evidence like product literature, manufacturing process details etc., the Tribunal could not interfere with the declared customs classification by the importers - Legality of Corrigendum and Revenue Appeals - The adjudicating authority issued a Corrigendum to impose penalties on Customs Brokers, and the department filed appeals seeking redemption fine and penalties - Whether the Corrigendum and the Revenue appeals are legally valid – HELD - The Corrigendum is not legally sustainable as the adjudicating authority becomes functus officio (having no further official duty or legal authority) after passing the original order, and can only correct clerical or arithmetical errors. The proposals for redemption fine and penalties are not legally tenable in the absence of availability of goods for confiscation and any evidence of active involvement or mens rea on the part of the Customs Brokers.
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