2026-VIL-380-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification and Valuation of Modular Kitchens - Respondent-importer imported modular kitchens in CKD/SKD condition – Rejection of declared value on the ground that the declared value per kg was significantly lower than earlier imports of the same importer - Whether modular kitchens in CKD/SKD condition are classifiable as furniture under Chapter 94 of the Customs Tariff, and whether such classification permits application of DGOV furniture guidelines for valuation - HELD - The modular kitchen units imported in CKD/SKD condition are appropriately classifiable under Heading 9403, more specifically under 9403.40 where predominantly wooden kitchen units are involved - Customs Tariff Act and the HSN Explanatory Notes specifically include kitchen cabinets and unit furniture within the scope of Chapter 94 on furniture - Disagree with reasoning of Commissioner (Appeals) that modular kitchens are not furniture merely because they are fixed upon installation, as Chapter Note 2 to Chapter 94 clarifies that cupboards and other unit furniture remain classifiable in Chapter 94 even if they are designed to be fixed to the wall. However, classification under Chapter 94 by itself does not automatically justify application of DGOV furniture valuation guidelines, as classification and valuation are distinct exercises governed by separate statutory provisions - The rejection of transaction value is not supported by a proper application of Rule 12 read with Rule 4 of the Customs Valuation Rules, 2007. The adjudicating authority had converted the article-wise transaction value into a mathematical per kilogram figure, which was an analytical construct and not the declared basis of sale. The comparison undertaken was internal, between different consignments of the same importer across different periods, without establishing that the goods compared were identical or similar in all material respects, as required under Rule 4 – The Orders-in-Appeal is upheld and the Revenue appeals are dismissed - Whether acceptance of declared value in remaining Bills of Entry was contrary to Rule 3(3) - HELD - The Tribunal held that the acceptance of the declared value in the remaining Bills of Entry was consistent with Rule 3(3)(a) of the Customs Valuation Rules, 2007 and with the principles laid down by the Supreme Court in Eicher Tractors Ltd. v. CC. The Tribunal observed that the Department had not produced NIDB data or third-party contemporaneous imports demonstrating systematic undervaluation in respect of the remaining Bills of Entry, and that mere existence of relationship does not shift the burden of proof.
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