2026-VIL-395-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Import Restrictions and BIS Certification - Consignments of stainless steel strips were intercepted and proceeded against for absolute confiscation on the grounds that they were imported in breach of the Steel and Steel Products (Quality Control) Order, 2020, for lacking Bureau of Indian Standards (BIS) certification - Whether the imported goods falling under Tariff Item 7220 2029 were subject to mandatory BIS certification or required an online waiver for clearance under the prevailing policy - HELD - The specific tariff item (7220 2029) was not enumerated in the tables appended to the Steel and Steel Products (Quality Control) Order dated 22nd December 2020, nor were the goods listed as inputs requiring certification for pipes and tubes - The requirement for an online waiver was a policy prescription introduced by a circular that post-dated the shipments in question. Consequently, the goods could not be charged with being non-compliant with BIS requirements in the absence of a specific finding referencing the Order's schedules. The invocation of Section 111(d) of the Customs Act, 1962, for the import of prohibited goods is held to be without legal sanction – The impugned order is set aside and the bills of entry as self-assessed entitled to be presented for clearance under section 47 of Customs Act, 1962 - The appeals are allowed - Customs - Misdeclaration and Classification - The importer declared the goods as 'end cut rejects' and 'defective,' but the department re-described them as 'prime' stainless steel strips and alleged misdeclaration under Section 111(m) of the Customs Act, 1962, based on a Chartered Engineer’s observation that the goods lacked rust or decay - Whether the variation in thickness and surface characteristics justified the classification of goods as 'defective' and whether the department's re-description was supported by competent expert evidence - HELD - The test reports confirmed the articles had uneven surfaces and varying thicknesses, which aligns with the Ministry of Steel’s criteria for 'defective' steel. The Tribunal criticized the department’s reliance on a Chartered Engineer whose specialization was in electronics, finding him incompetent to evaluate the metallurgical characteristics of steel strips. A 'pedestrian' observation regarding the absence of rust was insufficient to categorize the goods as 'prime.' As the classification under the Customs Tariff Act remained unchanged despite the description, the charge of misdeclaration with intent to evade duty was not established - Customs - Valuation and Expert Reports - The Revenue rejected the declared transaction value and enhanced it significantly by invoking Rule 9 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, relying solely on the valuation report provided by an electronics engineer acting as a Chartered Engineer - Whether the transaction value can be redetermined using the report of an expert who lacks domain expertise and without following the sequential application of the Valuation Rules – HELD - The redetermined value did not survive the test of law as the Revenue failed to follow the mandatory sequence under Rule 12 and Rule 3(4) of the Valuation Rules. The role of a Chartered Engineer is not recognized within the statutory scheme of the 2007 Valuation Rules for determining the value of imported goods, except in specific cases involving used capital goods for depreciation purposes. Since the department failed to benchmark the rejection of the transaction value through credible evidence or appropriate procedural rules, the enhancement of value is unsustainable.
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