2026-VIL-1544-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Misclassification and undervaluation of imported kitchen-wares - Appellant imported goods declared as Urea Houseware Trays and Bowls classified under CTH 68159990 but investigation revealed goods were made of Urea Formaldehyde Resin kitchenwares. Show Cause Notice proposed recovery of differential customs duty based on mis-declaration of description and undervaluation of goods. Respondent's statement acknowledged the goods were Urea Formaldehyde kitchenwares and deposited Rs. 3 lakhs without protest. Chemical composition test by CRCL confirmed goods were polymeric material composed of Urea Formaldehyde Resin with inorganic filler. Documents obtained from Chinese Customs through proper overseas enquiry showed exporter declared value approximately 65% higher than value declared by importer before Indian Customs despite suitable adjustments for freight and insurance - Whether goods were correctly classified and whether transaction value was rightly rejected - HELD - Goods were correctly identified as Urea Formaldehyde Resin based kitchenwares classifiable under CTH 39091010 and not under CTH 68159990 as declared. Transaction value was rightly rejected under Rule 12 of Customs Valuation Rules. Sequential rules for valuation have been followed while re-determining the value based on identical goods received from same exporter in previous consignments. Mandatory penalty under Section 114A was rightly imposed as the importer had clearly admitted the undervaluation and undervalue declaration - The demand of differential customs duty and penalty under Section 114A are upheld and appeals are allowed - Admissibility of documents obtained from foreign customs authorities under Section 139 of the Customs Act - In investigation, department obtained documents from Consulate of Hong Kong Customs with respect to four consignments through proper overseas enquiry channel and comparative chart prepared by Indian Customs in English translation. Respondent importer objected to these documents on ground that they were in alien language, did not bear seal or signature of Hong Kong customs officials and were not obtained through proper channel - Whether documents obtained from foreign customs authorities are admissible under Section 139 of the Customs Act - HELD - Documents obtained from Chinese Customs are covered under sub-clause (ii) of Section 139 as they were received from any place outside India in course of investigation through proper channel from competent authorities. The presumption of correctness is attached to documents under Section 139(ii) except when contrary is proved. Nothing on record proves the contrary except oral claim of importer. The said documents have been duly stamped by Indian Customs and chart prepared in English translation. The section nowhere mandates that document under that section shall only be in original. Department has sufficiently proved that documents were obtained through proper channel from competent authorities. Irrespective that documents are photo copies of declaration made before Chinese customs, Section 139 of the Customs Act has rightly been invoked by original adjudicating authority - Presumption of correctness attached to documents is upheld and appeals are allowed.
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