2026-VIL-1892-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Undervaluation of imported goods - Evidentiary value of statements under Section 108 of the Customs Act, 1962 - On intelligence of evasion of Customs duty by undervaluation and fabrication of documents, investigation was conducted against the importer of hop products, its directors and its employees. Parallel invoices were recovered from the premises, the laptop and the hard disc. SCN proposed rejection of the declared value, re-determination of value, demand of differential duty, confiscation and penalties, which the adjudicating authority confirmed. The Appellants did not make final submissions despite repeated adjournments, and the appeals were decided on merits. The Appellants had retracted their statements - Whether the hop products imported by the Appellants have been undervalued and whether the statements recorded under Section 108 can be relied upon - HELD - Section 108 empowers the gazetted officer of Customs to summon any person to give evidence or produce documents. Under sub-section (3) the persons summoned are bound to state the truth, and under sub-section (4) the inquiry is deemed a judicial proceeding. Customs officers are not police officers, so statements recorded by them are admissible as substantive evidence. A retraction must be contemporaneous and made at the first available opportunity. There was nothing on record to suggest that the statements were recorded under threat, and the statements were in the nature of admissions which need no further proof. Although the procedure under Section 138B was not followed, the statements were rightly relied upon in view of the distinguishing facts. The statements stand corroborated by documentary evidence. Invoices bearing the same number carried two different values, and the invoices filed before Customs carried altered and reduced values. The overseas enquiry revealed that the invoices submitted at import clearance were forged and that the exporters denied any knowledge of them. Procedural non-compliance is insufficient to falsify the corroborated documentary evidence - The Appellants have mis-declared the value of the imported goods, and the question is decided in favour of the Revenue - Rejection and re-determination of transaction value - Section 14 of the Customs Act, 1962 and Rules 3, 4, 5 and 12 of the Customs Valuation Rules, 2007 - The Department rejected the declared value of the imported hop products and re-determined it with reference to the value of similar goods imported at about the same time. The Appellants challenged the rejection and re-determination - Whether the declared value has rightly been rejected and re-determined - HELD - Under Section 14 read with Rule 3(1), the price actually paid or payable is ordinarily to be accepted as the transaction value, subject to Rule 12. The Assessing Officer can reject the declared value only by giving reasons supported by material. The Department obtained contemporaneous import invoices of the same and similar goods from other importers, and these showed values several times higher than the declared value. The foreign suppliers denied knowledge of the invoices filed in India. The declared value has therefore been rightly rejected, and Rules 3, 4 and 5 were sequentially followed in re-determining the value. The transaction value is not acceptable when goods of the same kind are imported at a higher price about the same time and the claim of a lower price is not substantiated by documentary evidence - The value has rightly been re-determined and the question is decided in favour of the Revenue - Differential duty, confiscation and penalty - Sections 28(4), 111(m), 112, 114A and 114AA of the Customs Act, 1962 - The adjudicating authority confirmed the differential duty with interest, held the goods liable to confiscation and imposed penalties on the importer, its directors and its employees - Whether the differential duty, confiscation and penalties are sustainable - HELD - In view of the finding that the value was mis-declared by use of forged invoices, the differential duty has rightly been confirmed under Section 28(4). The goods are rightly held liable to confiscation under Section 111(m). Penalty equal to the differential duty on the importer under Section 114A is upheld. The penalties on the other Appellants under Sections 112 and 114AA are also upheld - The order under challenge is upheld and the appeals are dismissed.
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