2026-VIL-1738-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Liability of Power of Attorney holders of a deceased sole proprietor for duty, interest, penalty and fine - Appellant was a proprietorship concern whose sole proprietor expired before issuance of the Show Cause Notice, which was served on the sons of the proprietor who held Power of Attorney and managed the business - Whether the authorised signatories of the deceased sole proprietor can be held liable to pay duty, interest, penalty and fine - HELD - Section 2(26) of the Customs Act, 1962 defines importer to include any owner, beneficial owner or any person holding himself out to be the importer. Beneficial owner under Section 2(3A) means any person who exercises effective control over the goods being imported. The son of the proprietor, in his statement under Section 108, acknowledged that he exercised effective control of the business as Power of Attorney holder and is therefore the beneficial owner. The objection to admissibility of the statements is not sustainable as the documentary evidence recording both sons as Power of Attorney holders prevails over oral testimony, and the Appellant could not falsify it - The authorised signatories holding Power of Attorney can be held liable for imports effected during the lifetime of the proprietor through them, and the issue is decided against the Appellant - Customs – Rejection of declared transaction value on the basis of NIDB data – Respondent rejected the declared value of imported watch movements under Rule 12 of the Customs Valuation Rules relying on NIDB data and a single foreign invoice, while the Appellant had mis-declared the quantity imported - Whether the rejection of declared value and enhancement of assessable value by referring to NIDB data is correct in law - HELD - Section 14 of the Customs Act, 1962, as amended, provides that the value of imported goods shall be the transaction value, that is the price actually paid or payable, which can be discarded only in the circumstances stipulated therein. The Respondent produced no evidence that the transaction value differed from the declared value or that the NIDB value pertained to similar products. The single foreign invoice relied upon was not part of the record and reliance on it violates the Valuation Rules. Mere NIDB data cannot form the basis of rejection of transaction value, and the burden was upon the Respondent to prove that the price paid or payable was at the enhanced rate - The declared value was wrongly rejected and enhanced. However, as the Appellant acknowledged the incorrect declaration of quantity, duty is payable on the undeclared quantity at the declared value per piece - Customs – Enhancement of value of past consignments on the basis of rejection of value of live consignments - Respondent enhanced the value of past Bills of Entry on the basis of the rejection of declared value in the live consignments - Whether the rejection of declared value of live consignments can form the basis of enhancement of value of the past consignments - HELD - The value per piece was rightly declared by the Appellant and the Respondent could not produce better evidence to reject it. The enhancement of value of the past Bills of Entry was founded only on the observations with respect to the live Bills of Entry, and once those findings are set aside, the enhancement is not sustainable - The order enhancing the value of past Bills of Entry is set aside in favour of the Appellant - Customs – Confiscation of goods of live and past consignments – Goods covered by past Bills of Entry had already been cleared - Whether the imported goods of live as well as past consignments are liable to confiscation - HELD - The confiscation of goods of past Bills of Entry was confirmed only because of the observations with respect to the live Bills of Entry, and since those findings are set aside, the confiscation is also liable to be set aside. The goods of past consignments were already cleared, and the order of confiscation of such goods has no legs to stand upon - The confiscation is set aside in favour of the Appellant - Customs – Penalty under Sections 112(a)(ii), 114A and 114AA of the Customs Act, 1962 – Appellant mis-declared the quantity of goods imported, which was an acknowledged fact - Whether the penalties are imposable under Sections 114A and 114AA of the Customs Act - HELD - As the admitted difference in quantity is huge, it is difficult to believe any bona fide. Penalty under Section 112(a)(ii) is not imposable as the present is not a case of confiscation. The penalty under Section 114AA is upheld on account of the admitted mis-declaration. Since the conclusion on valuation does not warrant penalty on the differential duty, the remaining penalty is not sustainable - The penalty under Section 114AA is upheld, the remaining penalty is set aside, and the appeal is partially allowed.
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