𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Tag: #CESTATDelhi

CESTAT Delhi Overturns Rs. 21.09 Lakh Customs Duty Demand Against H.R. Electronics
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 12.11.2025

CESTAT Delhi Overturns Rs. 21.09 Lakh Customs Duty Demand Against H.R. Electronics

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.

In a significant judgment, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled in favor of M/s H.R. Electronics, Delhi, setting aside a demand of Rs. 21.09 lakhs along with interest and penalty imposed by the Commissioner of Customs (Import & General), New Delhi. The case revolved around allegations of undervaluation of imported goods and the subsequent reassessment of their value by the Directorate of Revenue Intelligence (DRI).

Background of the Case

M/s H.R. Electronics had imported 12 consignments of components for Digital Receiver Sets of Chinese origin between February 2003 and September 2004. The company declared the transaction values in the Bills of Entry, which were initially enhanced by the proper officer during assessment. However, the DRI later alleged that the goods were undervalued based on contemporaneous import data from other importers who had declared higher values for similar goods. This led to the issuance of a Show Cause Notice (SCN) and the confirmation of the demand by the Commissioner of Customs.

Key Arguments by the Appellant 

The appellant, represented by legal counsel, argued that:
1. The prices of DTH components vary based on make, brand, and other factors, and the declared transaction values were accurate.
2. The Commissioner relied on values declared by other importers without allowing cross-examination, which violated principles of natural justice.
3. The values declared by the appellant had already been enhanced during the initial assessment, and a second enhancement was unsustainable.
4. The demand was issued under the proviso to Section 28(1) of the Customs Act, which requires evidence of collusion, wilful misstatement, or suppression of facts—none of which were proven in this case.
Revenue’s Stand 

The Revenue argued that the appellant had grossly undervalued the goods, as confirmed by contemporaneous import data and statements recorded under Section 108 of the Customs Act. They contended that the department had discharged its onus and that the impugned order should be upheld.

Tribunal’s Findings

After carefully examining the submissions and evidence, the Tribunal made the following observations:
1. The transaction values declared by the appellant were already enhanced by the proper officer during the initial assessment of the Bills of Entry. The DRI’s further enhancement of values lacked justification or evidence to prove the earlier assessment was incorrect.
2. The demand under the proviso to Section 28(1) of the Customs Act was unsustainable as there was no evidence of collusion, wilful misstatement, or suppression of facts by the appellant.
3. Statements recorded under Section 108 of the Customs Act were not admitted as evidence following the procedure prescribed under Section 138B, making them irrelevant to the case.
Final Verdict

The Tribunal concluded that the demand of duty, interest, and penalty could not be sustained due to the lack of evidence and procedural lapses. The impugned order was set aside, and the appeal was allowed with consequential relief to the appellant.

Implications of the Judgment

This ruling underscores the importance of adhering to procedural requirements and evidentiary standards in customs cases. It also highlights the need for authorities to provide clear and substantiated reasons when reassessing values or imposing penalties. For importers, this judgment serves as a reminder to maintain accurate documentation and challenge any unjustified demands or penalties. The decision is a significant win for M/s H.R. Electronics and sets a precedent for similar cases involving valuation disputes and procedural lapses.

Source: CESTAT Delhi

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November 12, 2025
CESTAT Delhi Invalidates Customs Demand Based on Unsealed CPU and Improper Valuation Method
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 08.11.2025

CESTAT Delhi Invalidates Customs Demand Based on Unsealed CPU and Improper Valuation Method

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.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has set aside the impugned orders in a series of appeals filed by importers and individuals challenging the differential duty demands, penalties, and redemption fines imposed by the Commissioner of Customs, ICD, Tughlakabad, New Delhi. The judgment, delivered on November 3, 2025, has brought significant relief to the appellants, including M/s KDS Exports, Gokul Overseas, Krish Enterprises, K.K. Enterprises, and three individuals.

Background of the Case

The case revolved around the import of artificial flowers from China during the period 2002-2006. The importers had declared invoice values in their Bills of Entry, which were assessed by the proper officer at a higher value of US$ 1.46 per kg based on contemporaneous import values. However, the Directorate of Revenue Intelligence (DRI) later initiated an investigation, alleging that the importers had undervalued the goods. The DRI claimed to have retrieved evidence of higher invoice values from CPUs seized during a panchnama.

The show cause notice (SCN) issued by the DRI proposed further enhancement of the values based on the retrieved data, which was contested by the appellants. The importers argued that the CPUs were not sealed at the time of seizure and were left unsealed for 47 days, raising questions about the authenticity of the retrieved data. They also contended that the electronic evidence lacked a certificate under Section 138C of the Customs Act, making it inadmissible.

Key Arguments and Tribunal Observations

The appellants presented several arguments, including:
1. Lack of Evidentiary Value of Retrieved Data: The CPUs were not sealed at the time of seizure, and the retrieved data lacked certification under Section 138C of the Customs Act, rendering it inadmissible.
2. Assessment by Proper Officer: During the relevant period, assessment was to be conducted by the proper officer based on contemporaneous values of imports. The DRI’s attempt to further enhance the values was deemed a review of the proper officer’s assessment, which is not permissible under the law.
3. Multiple Values for Imported Goods: The appellants highlighted discrepancies in the values, including those declared to Indian Customs, assessed by the proper officer, retrieved from the CPU, and declared to Chinese Customs. They argued that the proper officer’s assessment based on contemporaneous values should be upheld.
4. Invalid Seizure and Confiscation: The appellants contended that the SCN was issued beyond the six-month period stipulated under Section 110(2) of the Customs Act, making the seizure invalid.
5. Double Penalties: The appellants argued that penalties were imposed on both the proprietorship firms and their proprietors, which is not permissible under the law.
The Revenue, on the other hand, argued that the importers had misdeclared the values of the goods, and the retrieved invoices from the CPUs were the true commercial invoices. They also contended that the penalties were imposed on authorized representatives, not proprietors.

Tribunal’s Decision 

After considering the submissions and reviewing the evidence, the Tribunal ruled in favor of the appellants. The key findings of the Tribunal were:
1. The values retrieved from the CPUs could not be relied upon due to the lack of certification under Section 138C of the Customs Act and the fact that the CPUs were not sealed at the time of seizure, raising doubts about the authenticity of the data.
2. The proper officer had already assessed the Bills of Entry based on contemporaneous values of imports, which were deemed to be the values at which such goods were ordinarily sold in the course of international trade during the relevant period. The DRI’s attempt to further enhance the values was not sustainable.
3. The redetermination of values by the adjudicating authority based on the retrieved data was not supported by the Customs Act, and the demand for differential duty was set aside.
4. Penalties imposed on the appellants were also deemed unsustainable and were set aside.
Conclusion

This judgment underscores the importance of adhering to procedural requirements and evidentiary standards in customs investigations. The Tribunal’s decision highlights the need for proper handling of seized evidence and the limitations of retrospective valuation changes. The ruling provides significant relief to the appellants and sets a precedent for similar cases in the future.

Source: CESTAT Delhi

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November 8, 2025
CESTAT Delhi- Delay in uploading the PIMS certificate did not warrant confiscation or penalties
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 06.11.2025

CESTAT Delhi- Delay in uploading the PIMS certificate did not warrant confiscation or penalties

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.

In the realm of international trade, compliance with import regulations is a critical aspect that businesses must navigate carefully. A recent case involving M/s Greenlam Industries Ltd. sheds light on the importance of adhering to procedural requirements while also highlighting the distinction between mandatory and directory provisions in import policies.

The Case Overview

M/s Greenlam Industries Ltd., a company based in Rajasthan, filed multiple Bills of Entry (B/E) for importing Base Paper under the Customs Tariff Heading (CTH) 48119099. These imports were subject to the Paper Import Monitoring System (PIMS), a policy introduced by the Central Government under Notification No. 11/2015-2020 dated 25.05.2022. The PIMS mandates importers to register their consignments online and obtain a Registration Number between 75 days to 5 days prior to the expected arrival of the goods.

In this case, the goods arrived at ICD Kathuwas on 5th and 6th October 2022, but the importer registered under PIMS only on 7th and 10th October 2022, which was beyond the prescribed timeline. Consequently, the customs authorities deemed the import non-compliant and ordered the confiscation of goods under Section 111(d) of the Customs Act, 1962, along with a penalty under Section 112(a)(i).

The Appeal and Tribunal’s Decision 

The appellant challenged the confiscation and penalty, arguing that the delay in PIMS registration was due to late receipt of documents from the shipper. The case eventually reached the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), where Hon’ble Member (Judicial) Ms. Binu Tamta presided.

After reviewing the case, the Tribunal observed that the timeline for PIMS registration, as outlined in the notification, used the term “can,” which implies a directory rather than mandatory provision. The Tribunal emphasized that the delay in uploading the PIMS certificate was a procedural lapse and did not substantially affect the compliance with the import policy. The certificate was submitted before the clearance of goods, fulfilling the purpose of the import condition.

The Tribunal referred to precedents, including the Supreme Court’s judgment in Mangalore Chemicals & Fertilisers Ltd vs. Deputy Commissioner, which distinguished between substantive and procedural conditions. It concluded that minor procedural lapses should not lead to severe penalties or confiscation, especially when the substantive requirements are met.

Key Takeaways for Importers
1. Understand Import Regulations Thoroughly: Importers must familiarize themselves with the specific requirements of notifications and policies, such as PIMS, to avoid procedural lapses.
2. Timely Compliance is Crucial: While procedural lapses may not always lead to severe penalties, it is essential to adhere to timelines to avoid unnecessary legal complications.
3. Procedural vs. Substant ive Compliance: The case highlights the importance of distinguishing between mandatory and directory provisions in regulations. While substantive compliance is critical, minor procedural lapses may not necessarily result in severe consequences.
4. Documentation and Communication: Ensure timely receipt of necessary documents from shippers and maintain clear communication to avoid delays in compliance.
Conclusion

The Greenlam Industries case serves as a reminder of the complexities involved in import regulations and the importance of understanding the nuances of compliance. While the Tribunal’s decision to set aside the confiscation and penalty provides relief to the appellant, it underscores the need for importers to be vigilant and proactive in meeting regulatory requirements. By doing so, businesses can avoid legal disputes and ensure smooth operations in the global trade landscape.

Source: CESTAT Delhi

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November 6, 2025
CESTAT Delhi Overturns Drawback Denial of Texcomash Export
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 04.11.2025

CESTAT Delhi Overturns Drawback Denial of Texcomash Export

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.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled in favor of M/s Texcomash Export, allowing their appeal against the Order-in-Original No. 6/88/2005 dated 13.07.2005. The case revolved around the disallowance of a drawback amount of Rs. 31,66,822/- and the confiscation of goods related to 9 shipments of ladies’ garments exported by the appellant.

Background of the Case

The dispute dates back to export shipments made by M/s Texcomash Export between September 1994 and October 1994. The appellant exported 29 shipments of children’s garments and 9 shipments of ladies’ garments to Russia under the duty drawback scheme. However, the customs authorities alleged that the goods were over-invoiced to claim inflated drawback amounts. Following investigations, the value of the goods was reassessed, and the drawback amount was reduced. The appellant challenged the decision, leading to multiple rounds of litigation.

The primary contention in the case was whether M/s Texcomash Export was entitled to claim drawback for the 9 shipments of ladies’ garments, which were delivered to Dubai instead of Russia. The department argued that the goods did not reach Russia, violating the Reserve Bank of India (RBI) Circular No. 30/1993, which prohibited third-country exports financed by state credit funds. Consequently, the drawback was disallowed, and the goods were ordered to be confiscated.

Key Arguments

Appellant’s Arguments:
1. The appellant contended that the show cause notice was issued by an unauthorized officer, violating the Drawback Rules.
2. They argued that the Drawback Rules, 1995, invoked by the department, were not applicable to exports made in 1994, as the rules were not retrospective.
3. The appellant highlighted that the goods had been exported to a place outside India, fulfilling the definition of “export” under the Drawback Rules.
4. They emphasized that the remittances for the exports were received in India, and the RBI had released the funds, indicating compliance with the relevant regulations.
Department’s Arguments:
1. The department claimed that the goods were delivered to Dubai instead of Russia, violating the RBI Circular and making the drawback inadmissible.
2. They argued that the remittances received by the appellant could not be treated as export proceeds for the Russian consignee.
3. The department maintained that the confiscation of goods and disallowance of the drawback were justified under the Customs Act and Drawback Rules.
CESTAT’s Decision

The key observations and findings of the Tribunal were:
1. Definition of Export: The Tribunal clarified that under the Drawback Rules, export is defined as taking goods out of India to a place outside India. Since the goods were delivered to Dubai, the export was deemed complete, and the appellant was entitled to claim the drawback.
2. Non-Retrospective Application of Rules: The Tribunal held that the Drawback Rules, 1995, could not be applied retrospectively to exports made in 1994. Therefore, the department’s reliance on these rules was deemed legally impermissible.
3. Invalid Confiscation: The Tribunal noted that the goods were released provisionally in 1995-96, making their confiscation in the impugned order untenable.
4. RBI Circular: The Tribunal observed that the RBI had released the remittances in Indian rupees from state credit funds, which contradicted the department’s claim of a violation of the RBI Circular.
5. Lack of Evidence: The department failed to provide sufficient evidence to support its findings that the appellant was not entitled to the drawback.
Conclusion

In light of the above findings, the Tribunal set aside the impugned order and allowed the appeal, granting M/s Texcomash Export the drawback amount of Rs. 31,66,822/- for the 9 shipments of ladies’ garments. This decision is a significant victory for exporters, reaffirming their rights under the Drawback Rules and emphasizing the importance of adhering to legal provisions and procedures.

Connected Matter

Gujarat High Court Clarifies Recovery Period for Erroneously Paid Customs Drawback

Source: CESTAT Delhi

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November 4, 2025
CESTAT Delhi Sets Aside Revocation of Customs Broker License
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 03.11.2025

CESTAT Delhi Sets Aside Revocation of Customs Broker License

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), Principal Bench, New Delhi, recently delivered a significant judgment in the case of M/s Dehasu Logistics India Pvt Ltd. vs. Commissioner of Customs-Airport & General. The case revolved around the revocation of the customs broker license of the appellant, M/s Dehasu Logistics India Pvt Ltd., and the forfeiture of their security deposit, along with the imposition of penalties. The Tribunal, in its final order dated 15th October 2025, set aside the impugned order passed by the Commissioner of Customs, citing a violation of the principles of natural justice.

Background of the Case

The dispute originated from an Order-in-Original dated 12th September 2024, wherein the Commissioner of Customs revoked the customs broker license of M/s Dehasu Logistics India Pvt Ltd. The appellant challenged this order before the Tribunal, which initially decided the appeal on 4th November 2024. However, the department filed an appeal before the Delhi High Court, which directed the Tribunal to reconsider the matter and deliver a decision before 15th December 2025.

Key Arguments by the Appellant 

The appellant, represented by Advocate, raised two primary arguments:
1. Vagueness of the Show Cause Notice: The appellant contended that the show cause notice merely reproduced the order passed by the Additional Commissioner of Customs without specifying the reasons for alleged violations of regulations under the Customs Broker Licensing Regulations (CBLR), 2018.
2. Violation of Principles of Natural Justice: The appellant argued that the Commissioner of Customs had disagreed with the findings of the Inquiry Officer without providing reasons for the disagreement or an opportunity for the appellant to submit a representation.
Findings of the Inquiry Officer 

The Inquiry Officer meticulously examined the alleged violations of regulations 10(d), 10(e), 10(q), and 13(12) of the CBLR, 2018. The inquiry report concluded that the appellant had not violated any of the provisions and had complied with the regulations. Key findings included:
- No discrepancies were found in the export shipments handled by the appellant.
- The appellant had advised their client to comply with the Customs Act and related regulations.
- The appellant had exercised due diligence and cooperated with customs authorities during investigations.
- The appellant had ensured proper conduct of their employees, who were duly approved by the Customs Department.
Tribunal’s Observations

The Tribunal noted that while the Commissioner of Customs is not bound to accept the findings of the Inquiry Officer, it is mandatory to communicate the reasons for disagreement to the customs broker and provide an opportunity to respond. This principle was upheld in the Delhi High Court judgment in the Him Logistics case, which emphasized the importance of adhering to the principles of natural justice.

In the present case, the Commissioner failed to provide the appellant with the reasons for disagreement with the inquiry report, which was in favor of the appellant. This procedural lapse led the Tribunal to conclude that the impugned order was in violation of the principles of natural justice.

Final Decision

The Tribunal set aside the order dated 12th September 2024, revoking the customs broker license of M/s Dehasu Logistics India Pvt Ltd. The appeal was allowed, and the Tribunal emphasized the necessity of following due process and ensuring compliance with the principles of natural justice.

Source: CESTAT Delhi

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November 3, 2025
CESTAT Delhi- Refund Interest Must Be Paid Directly to Importer Not Credited to Consumer Welfare Fund
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 01.11.2025

CESTAT Delhi- Refund Interest Must Be Paid Directly to Importer Not Credited to Consumer Welfare Fund

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.

In a significant legal victory, Micromax Informatics Limited has successfully challenged the decision of the Commissioner of Customs (Appeals) regarding the refund and interest on excess countervailing duty (CVD) paid during the import of mobile handsets in 2014-2015. The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has ruled in favor of Micromax, allowing the company to receive both the principal refund amount and the interest accrued on delayed payments.

Background of the Case

Micromax Informatics Limited had imported mobile handsets during 2014-2015 and paid CVD at a higher rate without availing exemption under a specific notification. Following a Supreme Court ruling in the case of M/s SRF Ltd vs. Commissioner of Customs, Chennai, Micromax filed five refund applications for the excess duty paid. The Assistant Commissioner sanctioned the refund of the principal amount with interest but directed the funds to be credited to the Consumer Welfare Fund, citing unjust enrichment.

The Department challenged the payment of interest in four appeals before the Commissioner (Appeals), who subsequently set aside the Assistant Commissioner’s orders regarding interest. Micromax, on the other hand, filed appeals against the decision to credit the refund amount to the Consumer Welfare Fund.

Key Developments
1. Delhi High Court Intervention: Micromax filed a writ petition before the Delhi High Court, challenging the decision to credit the refund to the Consumer Welfare Fund. During the pendency of the petition, Micromax also filed appeals before the Commissioner (Appeals).
2. Commissioner (Appeals) Decision: On March 9, 2022, the Commissioner (Appeals) ruled in favor of Micromax, stating that the principal refund amount should be paid to the company instead of being credited to the Consumer Welfare Fund. However, the Commissioner (Appeals) did not sanction interest for four refund applications, which led Micromax to file appeals before the CESTAT.
3. CESTAT Ruling: On October 27, 2025, the CESTAT ruled in favor of Micromax, setting aside the earlier order and allowing the company to receive interest on the principal refund amount. The Tribunal emphasized that since the principal amount was directed to be credited to Micromax’s account, the interest on delayed payment should also be credited to the company.
Implications of the Judgment

This decision is a landmark ruling for businesses dealing with customs and excise matters. It reinforces the principle that when a refund is sanctioned, the rightful claimant is entitled to both the principal amount and the interest accrued due to delays. The judgment also highlights the importance of challenging decisions that may not align with legal precedents or established laws.

Conclusion

The CESTAT’s decision in favor of Micromax Informatics Limited sets a precedent for similar cases, ensuring that businesses are not unfairly deprived of their rightful refunds and interest. This case underscores the importance of pursuing legal remedies to protect business interests and uphold justice in matters of taxation and customs.

Source: CESTAT Delhi

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November 1, 2025
CESTAT Delhi – Import Valuation Cannot Include Advertising or Management Fees
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 31.10.2025

CESTAT Delhi – Import Valuation Cannot Include Advertising or Management Fees

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.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has ruled in favor of M/s Triumph Motorcycles (India) Pvt. Ltd., setting aside the order passed by the Additional Director General (Adjudication), Directorate of Revenue Intelligence (DRI), New Delhi. The case revolved around the inclusion of Advertisement and Promotional Expenses (APE) and Management Service Fees (MSF) in the transaction value of imported goods under Rule 10(1)(e) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Background of the Case

Triumph Motorcycles (India) Pvt. Ltd., a subsidiary of Triumph Motorcycles (Singapore) Pte. Ltd., imports motorcycles, parts, accessories, and clothing from its affiliated companies, Triumph Motorcycles Ltd., UK, and Triumph Motorcycles (Thailand) Ltd. The company entered into a Distributor Agreement and a Management Services Agreement with Triumph UK, which were renewed in 2017.

The DRI initiated an investigation and issued a show-cause notice in 2019, alleging that the APE and MSF incurred by Triumph India were a “condition of sale” of the imported goods and should be added to the transaction value under Rule 10(1)(e). The Additional Director General passed an order in 2020, confirming the demand for differential customs duty amounting to ₹21.85 crore, along with interest and penalties.

Key Issues in the Appeal 

The appeal raised several critical issues, including:
1. Whether APE incurred by Triumph India should be added to the value of imported goods under Rule 10(1)(e).
2. Whether MSF remitted to Triumph UK should be included in the transaction value.
3. Whether the extended period of limitation was applicable.
4. Whether interest and penalties under Sections 28AA and 114A of the Customs Act were justified.
Tribunal’s Observations and Ruling

After a detailed examination of the Distributor Agreement, Management Services Agreement, and relevant provisions of the Customs Act and 2007 Valuation Rules, the Tribunal ruled in favor of Triumph India. Key observations included:
1. APE Expenses: The Tribunal held that advertising and promotional expenses incurred by Triumph India were undertaken “on its own account” to promote its own business and were not a “condition of sale” of the imported goods. The Tribunal referred to the Interpretative Note to Rule 3(2)(b), which clearly states that marketing activities undertaken by the buyer on its own account cannot be added to the transaction value of imported goods.
2. MSF Payments: The Tribunal found that the Management Services Agreement was an independent commercial transaction unrelated to the import of goods. Payments made under this agreement were for business support services and had no direct correlation with the imported goods. The Tribunal cited previous rulings, including Thyssenkrupp Elevator (I) P. Ltd. vs. ACC (Import & General), New Delhi, to support its decision.
3. Interest and Penalty: Since neither APE nor MSF could be added to the transaction value, the Tribunal ruled that interest under Section 28AA and penalty under Section 114A of the Customs Act were not applicable.
4. Extended Limitation Period: The Tribunal did not find it necessary to examine the invocation of the extended period of limitation, as the impugned order was already set aside.
Final Verdict

The Tribunal concluded that the impugned order dated 24.09.2020 could not be sustained and set it aside, allowing the appeal filed by Triumph Motorcycles (India) Pvt. Ltd.

Implications of the Judgment

This decision is a significant win for Triumph Motorcycles India and sets a precedent for similar cases involving the inclusion of APE and MSF in the transaction value of imported goods. The ruling reinforces the principle that expenses incurred by an importer on its own account for marketing and promotional activities cannot be considered a “condition of sale” under Rule 10(1)(e) of the 2007 Valuation Rules. Additionally, it highlights the importance of distinguishing between independent commercial agreements and obligations tied to the sale of imported goods.

This judgment is expected to provide clarity and relief to importers facing similar disputes, ensuring that only legitimate costs directly related to the import of goods are included in the transaction value for customs duty purposes.

Connected Matter

CESTAT Delhi Holds Marketing & Sponsorship Expenses Not Includible in Assessable Value

Source: CESTAT Delhi

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October 31, 2025
CESTAT Delhi Overturns Penalties in Customs Valuation Dispute
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 30.10.2025

CESTAT Delhi Overturns Penalties in Customs Valuation Dispute

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.

In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, delivered a judgment on October 29, 2025, in the case of Appellant vs. Principal Commissioner of Customs. The Tribunal set aside penalties imposed under Sections 112(b)(ii) and 114AA of the Customs Act, 1962, highlighting critical procedural lapses and the importance of adhering to legal safeguards during investigations and adjudication.

Background of the Case

The appellant a partner in M/s Chandra Impex, challenged the order passed by the Principal Commissioner of Customs, ICD TKD, New Delhi, which imposed penalties of Rs. 5 lakhs under Section 112(b)(ii) and Rs. 50 lakhs under Section 114AA of the Customs Act. The case revolved around allegations of undervaluation of imported goods, specifically spray paints, in the 14th consignment imported by M/s Chandra Chemicals, a firm owned by the appellant’s father.

The department alleged that the appellant had submitted fraudulent commercial invoices to declare lower transaction values, while the actual values were reflected in proforma invoices retrieved from his email account during an investigation. The appellant, however, retracted his statement made under Section 108 of the Customs Act, claiming coercion and undue pressure during the investigation.

Key Issues Raised

The appellant’s counsel argued that the statement recorded under Section 108 of the Customs Act could not be relied upon due to the following reasons:
1. The statement was retracted immediately, citing coercion and threats.
2. The provisions of Section 138B of the Customs Act, which mandate examination and cross-examination of the person making the statement, were not followed.
3. The proforma invoices retrieved from the appellant’s email were not recorded under a panchnama, nor were they properly substantiated as evidence.
4. The department failed to provide evidence linking the proforma invoices to the alleged undervaluation of goods.
CESTAT’s Observations

The Tribunal meticulously analyzed the procedural requirements under Sections 108 and 138B of the Customs Act. It emphasized that statements recorded during investigations must be admitted as evidence only after the adjudicating authority examines the person making the statement and provides an opportunity for cross-examination. Failure to follow this mandatory procedure renders such statements inadmissible.

The Tribunal also noted:
- The appellant’s retraction of his statement highlighted the possibility of coercion during the investigation.
- The proforma invoices relied upon by the department were not properly substantiated or linked to the alleged undervaluation.
- The earlier 13 consignments had been cleared after physical examination by customs authorities, and no evidence was presented to prove undervaluation in those cases.
Final Decision

The Tribunal concluded that the charge of undervaluation could not be substantiated, and the transaction value declared in the commercial invoices could not be rejected under Rule 12 of the Customs Valuation Rules, 2007. Consequently, the confiscation of goods under Section 111(m) of the Customs Act and the imposition of penalties under Sections 112(b)(ii) and 114AA were deemed unsustainable.

Key Takeaways
1. Adherence to Legal Safeguards: The judgment underscores the importance of following mandatory procedures under Sections 108 and 138B of the Customs Act to ensure fairness and justice during investigations and adjudication.
2. Protection Against Coercion: The Tribunal highlighted the need to safeguard individuals from coercion or undue pressure during investigations, ensuring that statements are voluntary and admissible.
3. Evidence-Based Adjudication: Reliance on unsubstantiated evidence, such as proforma invoices, without proper linkage or corroboration, cannot form the basis for penalties or confiscation.
Conclusion

This landmark decision by CESTAT serves as a reminder of the critical role of procedural compliance in customs investigations and adjudication. It reinforces the principle that justice must not only be done but also be seen to be done, ensuring that individuals are not penalized based on assumptions or procedural lapses. The ruling is a significant step toward upholding transparency and fairness in customs law enforcement.

Source: CESTAT Delhi

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October 30, 2025
CESTAT Delhi Overturns Export Duty Demand
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 28.10.2025

CESTAT Delhi Overturns Export Duty Demand

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.

In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has set aside the impugned order passed by the Commissioner of Customs (Adjudication), New Delhi, in a case involving export duty on iron ore fines. This decision not only reinforces judicial discipline but also clarifies key aspects of customs law, particularly regarding the assessment of shipping bills and the determination of Fe content in iron ore fines.

Background of the Case

The case revolved around four appeals filed by M/s Disha Realcon Pvt. Ltd., Appellants, and M/s S.M. Ayat Niryat Pvt. Ltd. The appellants challenged the confirmation of export duty demands and penalties imposed by the Commissioner of Customs (Adjudication). The dispute stemmed from the Directorate of Revenue Intelligence (DRI) alleging that the appellants evaded export duty by splitting consignments into multiple shipping bills and availing exemptions for iron ore fines with Fe content below 58%.

The DRI proposed recalculating the Fe content of the exported iron ore fines on a dry basis, contrary to the Supreme Court’s ruling in Union of India vs. Gangadhar Narsingdas Aggarwal and the Central Board of Excise and Customs (CBEC) Circular No. 04/2012-Cus, which mandated Fe content determination on a wet basis.

Key Issues Addressed

The Tribunal examined two critical issues:
1. Assessment of Multiple Shipping Bills Together: The Tribunal clarified that the Customs Act does not empower officers to assess multiple shipping bills together. Each shipping bill must be assessed individually, and the classification, valuation, and determination of parameters like Fe content must be done separately for each shipping bill. The Tribunal emphasized that the issuance of a single Bill of Lading for goods covered under multiple shipping bills does not justify their combined assessment.
2. Determination of Fe Content: The Tribunal reaffirmed the Supreme Court’s decision in Gangadhar Narsingdas, which held that Fe content in iron ore fines must be determined on a wet basis, considering all impurities, including moisture. The Commissioner’s decision to calculate Fe content on a dry basis was deemed a violation of judicial discipline and CBEC’s directives.
Key Findings

The Tribunal made the following observations:
- The Customs Act does not allow the assessment of multiple shipping bills together.
- Exporters are within their rights to file multiple shipping bills for goods exported in the same vessel.
- The Fe content of iron ore fines must be determined on a wet basis, as per the Supreme Court’s ruling and CBEC’s Circular.
- The Commissioner of Customs (Adjudication) erred in assessing Fe content on a dry basis and in combining multiple shipping bills for assessment.
Outcome

The Tribunal set aside the impugned order dated November 30, 2022, and allowed all four appeals with consequential reliefs to the appellants. This decision is a significant victory for exporters and reinforces the importance of adhering to judicial precedents and established legal principles.

Implications of the Ruling

This landmark judgment has far-reaching implications for exporters and the customs authorities:
1. Reaffirmation of Judicial Discipline: The Tribunal’s decision underscores the importance of adhering to Supreme Court rulings and CBEC directives, ensuring consistency and fairness in the application of customs laws.
2. Clarity on Shipping Bill Assessments: The ruling clarifies that each shipping bill must be assessed individually, preventing arbitrary practices of combining multiple shipping bills for reassessment.
3. Standardization of Fe Content Determination: By upholding the wet basis method for determining Fe content, the Tribunal has provided clarity and consistency for exporters dealing with iron ore fines.
Conclusion

The CESTAT’s decision in this case is a testament to the importance of upholding judicial discipline and ensuring fair treatment of exporters under the law. It serves as a reminder to customs authorities to adhere to established legal principles and precedents while assessing duties and penalties. This ruling is a significant step towards ensuring transparency and fairness in India’s customs framework, fostering trust and confidence among exporters.

Source: CESTAT Delhi

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October 28, 2025
CESTAT Delhi Allows Amendment of Bills of Entry under Section 149
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.10.2025

CESTAT Delhi Allows Amendment of Bills of Entry under Section 149

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), Principal Bench, New Delhi, recently delivered a significant judgment in the case of M/s Celkon Impex Pvt. Ltd. vs. Principal Commissioner of Customs. This decision, encapsulated in Final Order No. 51605-51608/2025, has set a precedent for the interpretation and application of Section 149 of the Customs Act, 1962, concerning the amendment of Bills of Entry.

Background of the Case

M/s Celkon Impex Pvt. Ltd., the appellant, imported mobile phones between August 2014 and June 2015, classifying them under Customs Tariff Heading 8517 of the Customs Tariff Act, 1975. At the time of filing the Bills of Entry, the appellant did not claim the benefit of a concessional 1% Additional Duty of Customs under Notification No. 12/2012-CE dated 17.03.2012. Later, relying on the Supreme Court’s decision in SRF Limited vs. Commissioner of Customs, Chennai, the appellant filed an application under Section 149 of the Customs Act to amend the Bills of Entry and claim the concessional duty.

The Deputy Commissioner of Customs allowed the amendment and ordered reassessment under Section 17(4) of the Customs Act. However, the department challenged this decision, and the Commissioner (Appeals) overturned the Deputy Commissioner’s order, stating that the assessment of the Bills of Entry had become final since the appellant had paid the higher duty without protest.

Key Legal Issues

The case revolved around two major legal questions:
1. Whether the appellant could invoke Section 149 of the Customs Act to amend the Bills of Entry after the goods had been cleared for home consumption.
2. Whether the appellant could claim the benefit of the Supreme Court’s judgment in SRF Limited despite having paid higher Additional Duty without protest.
Tribunal’s Observations and Decision 

The Tribunal analyzed the submissions made by both parties and referred to several landmark judgments, including SRF Limited, Dimension Data India, and Sony India. The key takeaways from the judgment are:
1. Amendment of Bills of Entry under Section 149: The Tribunal emphasized that Section 149 of the Customs Act allows for amendments to Bills of Entry even after goods have been cleared for home consumption, provided the amendment is based on documentary evidence that existed at the time of clearance. This interpretation aligns with the decisions of the Bombay High Court and Telangana High Court, which have upheld the right of importers to seek amendments under Section 149.
2. Finality of Assessment: The Tribunal rejected the Commissioner (Appeals)’ view that the payment of higher Additional Duty without protest rendered the assessment final. It held that the appellant could still seek amendments in the Bills of Entry under Section 149 to claim the benefit of the Supreme Court’s judgment in SRF Limited.
3. Precedents Supporting the Appellant: The Tribunal referred to its earlier decisions in Akshar Telecom Pvt. Ltd. and Vivo Mobile India Pvt. Ltd., which supported the appellant’s contention that amendments under Section 149 are permissible for claiming duty benefits.
Implications of the Judgment

This judgment is a significant development in customs law, as it reinforces the principle that importers can seek amendments to Bills of Entry under Section 149 of the Customs Act, even after goods have been cleared for home consumption. It also clarifies that the payment of higher duty without protest does not preclude an importer from claiming benefits under relevant notifications, provided the conditions of the notification are satisfied.

The decision is a win for importers, as it provides clarity on the legal remedies available for amending Bills of Entry and claiming refunds under Section 27 of the Customs Act. It also underscores the importance of adhering to the principles laid down by the Supreme Court in cases like SRF Limited and ITC Ltd., ensuring that justice is served in cases of incorrect duty assessments.

Conclusion

The CESTAT’s decision in the M/s Celkon Impex Pvt. Ltd. case is a landmark ruling that upholds the rights of importers to seek amendments in Bills of Entry under Section 149 of the Customs Act. By setting aside the Commissioner (Appeals)’ order, the Tribunal has reaffirmed the importance of following established legal precedents and ensuring fair treatment for importers. This judgment will undoubtedly serve as a guiding light for similar cases in the future, promoting clarity and consistency in the application of customs laws.

Source: CESTAT Delhi

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October 24, 2025