ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 09.10.2025
CESTAT Delhi- Statement Under Section 108 Not Admissible Without Compliance of Section 138B of Customs Act
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, recently delivered a significant judgment in the case of A R Fabrics Pvt. Ltd. vs. Principal Commissioner, Customs (Preventive). โThis decision, issued on October 1, 2025, sheds light on the admissibility of statements recorded under Section 108 of the Customs Act, 1962, and the procedural safeguards required under Section 138B of the Act. Hereโs a detailed breakdown of the case and its implications.
Background of the Case
The appeal arose from an order dated May 28, 2021, passed by the Commissioner of Customs (Appeals), which upheld an earlier order by the Joint Commissioner of Customs. The dispute revolved around the reassessment of the value of imported “polyester knitted fabric mixed” declared in two Bills of Entry dated October 3, 2019. โ The Joint Commissioner had rejected the declared value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and reassessed it under Rule 5 based on contemporary import data. โ This reassessment led to the recovery of differential customs duty, penalties, and confiscation of goods with an option to pay a redemption fine. โ
The Commissioner (Appeals) relied solely on the appellantโs statement recorded under Section 108 of the Customs Act, where the appellant had admitted to undervaluation and waived their right to a show cause notice and personal hearing.
Source: CESTAT Delhi
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