2026-VIL-513-CESTAT-CHD-CU
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CUSTOMS CESTAT Cases

Customs - Enhancement of value for reconditioned and used digital multi-function devices - Whether the department is justified in rejecting the declared transaction value and enhancing it based on an expert’s report without conducting a market survey or following the sequential application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – HELD - The authorities failed to follow the mandatory sequential methodology prescribed under the Valuation Rules. Revenue primarily relied upon a chartered engineer's certificate which lacked a basis in current market surveys and failed to provide a robust comparison with identical or similar goods - In cases of second-hand capital goods, the department cannot unilaterally discard the transaction value without establishing its inaccuracy through evidence that aligns with the statutory rules. Following the ratio of the appellant’s own previous case and established judicial precedents, it is held that the rejection of the transaction value is invalid due to the absence of market-based evidence and the failure of the lower authorities to justify the specific Rule under which the value was re-determined. The revision of value is set aside for want of evidence and the declared value is accepted – The enhancement of the value is set aside and the redemption fine and penalty are reduced – The appeal is partly allowed - Confiscation and Redemption - Quantum of fine and penalty for restricted imports - Whether the authorities were correct in restricting redemption to re-export only and whether the quantum of the redemption fine and penalty imposed was excessive for the import of restricted, as opposed to prohibited, goods – HELD - There exists a fundamental distinction between "prohibited" and "restricted" goods under the Customs Act. For restricted items such as used multi-function devices, which possess certified residual utility and are not expressly prohibited for importation, the adjudicating authority is obliged to offer the owner an option to pay a fine in lieu of confiscation for home consumption - the consistent judicial practice for such restricted imports is to fix the redemption fine and penalty at a specific percentage of the assessable value to ensure uniformity and justice. Accordingly, the redemption fine should be limited to ten percent and the penalty to five percent of the assessable value - Redemption fine reduced to 10% and penalty reduced to 5% of the assessable value.
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