𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Tag: #CESTATHyderabad

CESTAT Hyderabad Resolves Classification Dispute on Imported Facsimile Machines
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.03.2026

CESTAT Hyderabad Resolves Classification Dispute on Imported Facsimile Machines

Adv Ravi Shekhar Jha

This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) 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, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, recently delivered a significant judgment in the case of M/s Space Technologies vs. Commissioner of Customs Hyderabad – Customs (Customs Appeal No. 28146 of 2013). This case revolved around the classification of imported facsimile machines and their parts, and the applicability of customs duty exemptions under Notification No. 24/2005-Customs dated 01.03.2005. The final order, pronounced on March 13, 2026, has set a precedent for resolving classification disputes based on technical capabilities and legal interpretation.

Background of the Case 

M/s Space Technologies imported facsimile machines and parts from M/s Panasonic Asia Pacific, Singapore during the financial years 2007-08 and 2008-09. The company filed Bills of Entry, classifying the goods under Customs Tariff Heading (CTH) 8443 3260, which pertains to facsimile machines capable of connecting to an Automatic Data Processing (ADP) machine or network. This classification allowed the company to claim exemption from Basic Customs Duty (BCD) under Notification No. 24/2005-Customs.

However, the Directorate of Revenue Intelligence (DRI) investigated the imports and issued a Show Cause Notice (SCN), alleging that the facsimile machines were misclassified. The department argued that the machines should be classified under CTH 8443 3970 (facsimile machines not capable of connecting to ADP machines or networks) and their parts under CTH 8443 9960, making them ineligible for the BCD exemption. The adjudicating authority upheld the department’s classification, confirming a demand for differential customs duty of Rs. 8,55,011/- along with interest and an equal amount of penalty.

Aggrieved by this decision, M/s Space Technologies filed an appeal before the Commissioner (Appeals), who upheld the adjudicating authority’s order. Subsequently, the company approached the CESTAT, Hyderabad, challenging the impugned order.

Key Issues in the Case 

The primary issue in this case was the classification of the imported facsimile machines and their parts. The dispute centered around whether the machines were capable of connecting to an ADP machine or network, which would determine their classification under the Customs Tariff.

The appellant argued that the imported facsimile machines were capable of networking with the help of external devices such as VBC of ATA adapters. They contended that the classification under CTH 8443 3260 was correct, as the machines met the criteria for connectivity to a network. The appellant also argued that the burden of proof to establish misclassification lay with the department, which had failed to provide technical evidence to support its claim.

Tribunal’s Observations and Findings 

After hearing both sides and reviewing the records, the Tribunal made the following key observations:
1. Classification Based on Connectivity: The Tribunal agreed with the appellant’s argument that the tariff entry differentiates facsimile machines based on their capability to connect to an ADP machine or network. Since the imported machines were capable of networking with external devices, they were correctly classified under CTH 8443 3260.
2. Burden of Proof: The Tribunal emphasized that the burden of proving the classification under a specific tariff entry lies with the department. In this case, the department failed to provide technical evidence to establish that the imported machines were not capable of connecting to a network or ADP machine.
3. Assessment and Physical Verification: The Tribunal noted that the goods were assessed by the department at the time of import and cleared after physical verification. Therefore, the allegation of deliberate misclassification was not sustainable in the absence of evidence of suppression or willful misstatement.
4. Extended Period of Limitation: The Tribunal held that the dispute was related to the interpretation of tariff entries and the technical capability of the machines. As such, the extended period of limitation could not be invoked, as per the judgment of the Hon’ble Andhra Pradesh High Court in CC & CE vs. Indian Institute of Chemical Technology.
5. Retrospective Application of Circular: The Tribunal ruled that Circular No. 11/2008-Cus dated 01.07.2008, which was relied upon by the department, could only be applied prospectively, especially when it imposes a burden adverse to the importer. This principle was upheld by the Hon’ble Supreme Court in HM Bags Manufacturer vs. CCE.
6. Penalty Imposition: The Tribunal found that the imposition of penalty was unsustainable, as the case involved a bona fide interpretation of classification. It cited the judgment in Pearl Enterprises vs. CC (Port), Kolkata, which held that mere claims of classification based on reasonable belief cannot be considered as misdeclaration.
Final Decision

The Tribunal set aside the impugned Order-in-Appeal dated 27.06.2013, allowing the appeal filed by M/s Space Technologies. The demand for differential duty and the imposition of penalties were deemed unsustainable. The Tribunal also granted consequential relief to the appellant as per the law.

Key Takeaways
1. Importance of Technical Evidence: This case highlights the necessity for the department to provide concrete technical evidence when challenging the classification of imported goods.
2. Burden of Proof: The judgment reinforces the principle that the burden of proving misclassification lies with the department.
3. Interpretation of Tariff Entries: The Tribunal emphasized that classification disputes should be resolved based on the functional capabilities of the goods and the language of the tariff entries, rather than assumptions.
4. Retrospective Application of Circulars: Circulars that impose adverse burdens on importers cannot be applied retrospectively, as per established legal precedents.
5. Penalty in Classification Disputes: Penalties cannot be imposed in cases involving bona fide disputes over classification or interpretation of law.
Conclusion

The CESTAT Hyderabad’s decision in the case of M/s Space Technologies vs. Commissioner of Customs Hyderabad – Customs serves as a landmark ruling in the realm of customs law. It underscores the importance of adhering to established legal principles in classification disputes and provides clarity on the interpretation of tariff entries. This judgment is expected to have a significant impact on similar cases in the future, ensuring that importers are not unfairly penalized for genuine classification disputes.

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Source: CESTAT Hyderabad

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March 24, 2026
CESTAT Hyderabad Sets Aside Export Valuation Order
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 07.02.2026

CESTAT Hyderabad Sets Aside Export Valuation Order

Adv Ravi Shekhar Jha

This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Hyderabad recently delivered a significant judgment in the Customs Appeal No. 20682 of 2015, which revolved around the valuation of export goods and the rejection of declared transaction values. This case highlights the importance of adhering to legal procedures and principles in determining export valuation under the Customs Act, 1962, and the Export Valuation Rules, 2007.

Background of the Case

The appellant, M/s S.K. Sarawagi & Co. Pvt Ltd, engaged in the export of iron ore fines, filed two shipping bills for exporting 10,500 WMT of iron ore fines with 61% Fe content to a buyer in Hong Kong, China. The declared unit price was USD 115 PDMT FOB, and the moisture content was declared at 9%. However, the Visakhapatnam Customs House adopted a moisture content of 3% and provisionally assessed the declared price, pending finalization based on test results and submission of final documents.

Upon finalization, the Original Authority rejected the declared price and adopted USD 128 PDMT FOB, citing contemporaneous export prices of M/s Rungta Sons Pvt Ltd. Additionally, the Original Authority imposed a duty on 3.4% of the export goods, considering the lumps exceeding the tolerance limit of 5% as per Notification No. 56/2010-Cus. Consequently, the appellant was ordered to pay Rs. 2,97,081/- along with applicable interest.

The appellant challenged this decision before the Commissioner (Appeals), who upheld the Original Authority’s order. Dissatisfied with the outcome, the appellant filed an appeal with the CESTAT.

Key Issues in the Case

The primary dispute in this case revolved around the rejection of the declared transaction value of USD 115 PDMT FOB and the adoption of USD 128 PDMT FOB as the assessable value. The appellant argued that the Original Authority failed to provide valid reasons for rejecting the declared transaction value and did not follow the prescribed procedures under Rule 8 of the Export Valuation Rules, 2007.

The appellant contended that the adjudicating authority had chosen the highest price from the contemporaneous export prices without considering adjustments for differences in export dates, commercial levels, quantity levels, composition quality, and domestic freight charges. Furthermore, the appellant emphasized that the transaction value, supported by the Bank Realization Certificate (BRC), should be accepted unless there is substantive evidence to prove that the declared value is not genuine.

Legal Framework for Export Valuation 

Section 14(1) of the Customs Act, 1962, and the Export Valuation Rules, 2007, provide the legal framework for determining the value of export goods. According to Section 14(1), the transaction value, i.e., the price actually paid or payable for the goods, is the basis for valuation, provided the buyer and seller are not related, and the price is the sole consideration for the sale.

Rule 4(2) of the Export Valuation Rules outlines the factors that must be considered when determining the value of export goods, including differences in export dates, commercial levels, quality, and domestic freight charges. Additionally, Rule 8 mandates that the proper officer must issue a query memo, provide reasons for doubting the declared transaction value, and offer a personal hearing before rejecting the declared price.

CESTAT’s Observations and Judgment

After hearing both sides and reviewing the records, the CESTAT found that the adjudicating authority had failed to provide valid reasons for rejecting the declared transaction value. The authority did not raise any doubts about the transaction value or the BRC, nor did it follow the procedures prescribed under Rule 8 of the Export Valuation Rules.

The tribunal emphasized that the rejection of transaction value without substantive evidence is legally untenable. It cited several landmark judgments, including CC, Mumbai Vs Vishal Exports Overseas Ltd and Century Metal Recycling (P) Ltd Vs UOI, which established that transaction value corroborated by sale/purchase contracts and BRC cannot be rejected without valid reasons and evidence.

The CESTAT concluded that the impugned order of the Commissioner (Appeals) was not proper, legal, or correct. It set aside the order and remanded the case to the Assessing Officer for finalization of the assessment based on the transaction value as reflected in the BRC.

Key Takeaways from the Case
1. Adherence to Legal Procedures: The case underscores the importance of following the prescribed procedures under the Customs Act and Export Valuation Rules when rejecting declared transaction values. Proper officers must issue query memos, provide reasons for doubt, and offer personal hearings before making a decision.
2. Transaction Value as the Basis for Valuation: The transaction value, supported by valid documentation such as the BRC, is the primary basis for export valuation. It cannot be rejected without substantive evidence proving its inaccuracy or lack of genuineness.
3. Contemporaneous Prices: When comparing declared transaction values with contemporaneous export prices, adjudicating authorities must consider all relevant factors, including differences in export dates, quality, and commercial levels. Arbitrarily choosing the highest price is not permissible.
4. Legal Precedents: The judgment highlights the significance of legal precedents in export valuation disputes. Decisions by higher courts, such as the Supreme Court, provide clear guidelines for assessing transaction values and rejecting declared prices.
Conclusion

The CESTAT’s decision in Customs Appeal No. 20682 of 2015 serves as a reminder of the importance of transparency, adherence to legal procedures, and reliance on substantive evidence in export valuation cases. It reinforces the principle that transaction value, supported by valid documentation, should be the primary basis for valuation unless there are compelling reasons to reject it. This case is a valuable reference for exporters, customs authorities, and legal professionals dealing with valuation disputes under the Customs Act, 1962.

Source: CESTAT Hyderabad

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February 7, 2026
CESTAT Hyderabad Overturns Customs Valuation Order
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 03.02.2026

CESTAT Hyderabad Overturns Customs Valuation Order

Adv Ravi Shekhar Jha

This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) 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.comor on his Mobile +91-9999005379.

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Regional Bench at Hyderabad recently delivered a significant judgment in the case of M/s Elkem South Asia Pvt Ltd vs. Commissioner of Customs Visakhapatnam. This case revolved around the rejection of transaction value and the re-determination of assessable value based on alleged contemporaneous prices. The final order, pronounced on January 30, 2026, provides valuable insights into the application of Customs Valuation Rules and the treatment of related parties in import transactions.

Background of the Case

M/s Elkem South Asia Pvt Ltd, a 100% subsidiary of Elkem AS Norway, acts as the exclusive dealer and reseller of Elkem Micro Silica (EMS) in South Asia, including India, Sri Lanka, and Nepal. The company imports EMS from its principal through various ports, including Visakhapatnam. Since the appellant is a wholly-owned subsidiary of the principal, it is considered a “related person” under customs regulations. This relationship was disclosed to the Special Valuation Branch (SVB) in Mumbai, which allowed the imports based on the transaction value (invoice value) since 2000.

However, for certain imports made through Visakhapatnam Port, the Appraising Officers assessed customs duty based on higher values derived from third-party imports by M/s Vesuvius India Pvt Ltd, an actual consumer of EMS. The appellant paid the duty under protest, and the assessments were finalized for 21 Bills of Entry (BoE) on May 2, 2016. While some amounts were refunded, the appellant challenged the assessment order before the Commissioner (Appeals), who upheld the decision. This led to the present appeal before the CESTAT.

Key Arguments Presented 

Appellant’s Arguments:
1. Transaction Value Validity: The appellant argued that their transaction value should not be rejected merely because they are a related party. The SVB had previously accepted their transaction value as the basis for customs duty, and the relationship between the appellant and the principal was deemed not to influence the price.
2. Contemporaneous Price: The appellant contended that the contemporaneous price adopted by the department was based on a single Bill of Entry from M/s Vesuvius India Pvt Ltd, which imported a significantly smaller quantity of EMS and was an actual user, not a reseller. This comparison was not valid under the Customs Valuation Rules.
3. Protest Payment: The appellant clarified that the duty was paid under protest, supported by submitted letters, and they did not agree to the enhancement of the unit price.
Respondent’s Arguments:

The department reiterated the findings of the Commissioner (Appeals), emphasizing the validity of the contemporaneous price and the rejection of the transaction value.

Tribunal’s Observations and Decision

After hearing both sides and reviewing the records, the Tribunal made the following observations:
1. Validity of SVB Orders: The SVB orders dated April 13, 2011, and January 30, 2015, were crucial in determining the transaction value. The Tribunal noted that the SVB had already examined the relationship between the appellant and the principal and concluded that it did not influence the price. The SVB order from 2011 was valid for three years, contrary to the department’s claim that it expired in 2013.
2. Contemporaneous Price: The Tribunal found that the adoption of the contemporaneous price from M/s Vesuvius India Pvt Ltd was flawed. The third party was an actual user, not a reseller, and imported a significantly smaller quantity of EMS. The Customs Valuation Rules require adjustments for differences in commercial levels, quantity, and other factors, which were not adequately demonstrated by the department.
3. Rejection of Transaction Value: The Tribunal held that the rejection of the transaction value by the Appraising Officer was not sustainable. The SVB had already determined that the declared value was not influenced by the relationship between the appellant and the principal. The discounts provided by the principal were deemed normal, considering the appellant’s role as a reseller.
4. Protest Payment: The Tribunal acknowledged that the appellant paid the duty under protest, further supporting their claim that the transaction value was valid.
Final Order

The Tribunal concluded that the Commissioner (Appeals) erred in upholding the rejection of the transaction value and the adoption of the contemporaneous price. The Tribunal set aside the impugned order and allowed the appeal with consequential relief as per the law.

Key Takeaways
1. Importance of SVB Orders: The case highlights the significance of SVB orders in determining the transaction value for related parties. Once the SVB has validated the transaction value, it cannot be arbitrarily rejected without substantial evidence.
2. Contemporaneous Price: The judgment underscores the importance of adhering to the Customs Valuation Rules when adopting contemporaneous prices. Comparisons must be made between identical goods, similar quantities, and buyers of the same commercial class.
3. Protest Payments: Importers should ensure proper documentation when paying duties under protest, as it can strengthen their case during appeals.
4. Role of Resellers vs. Actual Users: The Tribunal emphasized the distinction between resellers and actual users in determining assessable value, as their commercial levels and cost structures differ significantly.
Conclusion

The judgment in the case of M/s Elkem South Asia Pvt Ltd vs. Commissioner of Customs Visakhapatnam serves as a precedent for importers dealing with related parties and facing challenges in the determination of transaction value. It reinforces the principle that transaction value should be accepted unless there is concrete evidence to prove that the relationship has influenced the price. Additionally, it highlights the need for proper application of Customs Valuation Rules when considering contemporaneous prices. This case is a reminder of the importance of transparency, documentation, and adherence to statutory provisions in customs assessments.

Source: CESTAT Hyderabad

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February 3, 2026
CESTAT Hyderabad Overturns Penalties and Confiscation in Customs Duty Dispute: Emphasis on Voluntary Disclosure
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 13.01.2026

CESTAT Hyderabad Overturns Penalties and Confiscation in Customs Duty Dispute: Emphasis on Voluntary Disclosure

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.comor on his Mobile +91-9999005379.

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Hyderabad recently delivered a significant judgment in the case of M/s Paschal Form Work (I) Pvt Ltd. and its General Manager, against the Commissioner of Customs, Visakhapatnam. This case, which revolved around the alleged misdeclaration of imported goods and subsequent penalties, highlights the importance of transparency, voluntary disclosure, and adherence to customs regulations.

Background of the Case

The case originated from a purchase order issued by M/s Paschal Form Work (I) Pvt Ltd. to its parent company for the import of steel bars. The purchase order contained two separate offers, each valued at €86,139.67, along with carriage and freight (C&F) charges of €4,020. The goods were shipped and reached Visakhapatnam on July 28, 2009. The company engaged M/s Sea Bird Sea and Air Logistics Division, a Custom House Agent (CHA), to handle the clearance of the imported goods.

However, due to confusion regarding the purchase order and invoices, the CHA mistakenly excluded the C&F charges and two invoices from the bill of entry (BOE). This led to a short payment of customs duty. The appellants, being first-time importers, were unaware of the significance of this error and relied on the advice of the CHA to amend the purchase order. The CHA further altered the invoice by deleting the C&F charges, which resulted in the misdeclaration of the value of the imported goods.

Discovery of the Discrepancy 

In December 2009, during an internal reconciliation of records, M/s Paschal Form Work (I) Pvt Ltd. discovered the discrepancy in the BOE and immediately informed the CHA. The company expressed its willingness to pay the differential duty along with interest and requested the CHA to resolve the issue with the Customs Department. The CHA admitted to the error and approached the Customs Department, which initiated an investigation into the matter.

Investigation and Adjudication

The Customs Department conducted a search at the appellant’s factory premises in February 2010 and seized the imported goods. To avoid disruption in production, the appellants voluntarily deposited the differential duty, interest, and other charges, and the goods were provisionally released.

Following the investigation, a Show Cause Notice (SCN) was issued on July 5, 2010, alleging suppression and willful misdeclaration of facts. The Adjudicating Authority passed an Order-in-Original (O-I-O) on December 27, 2012, confirming the demand for short-paid duty, imposing penalties, and ordering the confiscation of goods. The appellants challenged the O-I-O before the Commissioner (Appeals), who upheld the order. Subsequently, the appellants filed appeals before the CESTAT Hyderabad.

Key Arguments by the Appellants

The appellants argued that the discrepancy was voluntarily disclosed to the Customs Department through their CHA, and the differential duty was paid well before the issuance of the SCN. They contended that the investigation was initiated based on their voluntary disclosure, not due to any independent detection of suppression or collusion. The appellants relied on several judicial precedents, including:
1. Faiveley Transport Rail Technologies India Pvt Ltd. vs. CC (CESTAT, New Delhi): This case established that once the duty and interest are paid before the issuance of an SCN, no SCN should be issued under Section 28(2) of the Customs Act.
2. Wockhardt Ltd. vs. CC (CESTAT, Mumbai): It was held that no penalty could be imposed when the differential duty and interest were paid before the issuance of an SCN.
The appellants also emphasized that there was no malafide intention behind the non-payment of the differential duty, as the error was due to the CHA’s advice and their inexperience as first-time importers.

Decision of the Tribunal

After hearing both parties and reviewing the evidence, the Tribunal concluded that the appellants had acted in good faith by voluntarily disclosing the discrepancy and paying the differential duty and interest before the issuance of the SCN. The Tribunal noted that the appellants had no malafide intention and that the CHA had admitted to the error.

The Tribunal referred to the judicial precedents cited by the appellants and held that the issuance of the SCN was unwarranted under Section 28(2) of the Customs Act. It also ruled that the confiscation of goods and imposition of penalties were not sustainable, as the appellants had voluntarily rectified the error and cooperated with the investigation.

Final Order

The CESTAT Hyderabad allowed the appeals filed by M/s Paschal Form Work (I) Pvt Ltd. and its General Manager, setting aside the impugned order. The Tribunal emphasized the importance of voluntary compliance and transparency in customs matters and granted consequential relief to the appellants as per the law.

Key Takeaways
1. Voluntary Disclosure: The case underscores the significance of voluntary disclosure in customs matters. The appellants’ proactive approach in identifying and rectifying the error played a crucial role in the Tribunal’s decision.
2. Role of CHAs: The case highlights the critical role of CHAs in customs clearance and the potential consequences of errors or misjudgments in documentation.
3. Judicial Precedents: The Tribunal’s reliance on previous judgments demonstrates the importance of established legal principles in ensuring fair and consistent adjudication.
4. No Malafide Intention: The absence of malafide intention was a key factor in the Tribunal’s decision to set aside the penalties and confiscation.
This landmark judgment serves as a reminder to importers and CHAs about the importance of accurate documentation and compliance with customs regulations. It also reinforces the principle that voluntary disclosure and cooperation with authorities can mitigate penalties and legal consequences in cases of genuine errors.

Source: CESTAT Hyderabad

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January 13, 2026
CESTAT Hyderabad Overturns Foreign Currency Confiscation

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 18.11.2025

CESTAT Hyderabad Overturns Foreign Currency Confiscation

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, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has ruled in favor of the appellant, in a case involving the confiscation of foreign currency. The judgment, delivered by Hon’ble Member (Judicial), highlights critical legal principles and procedural lapses that led to the decision.

Case Background

The case originated from an incident on September 30, 2000, when Appellant, an 80-year-old retired professor from JNTU Hyderabad, was intercepted by CISF officers at the airport while traveling to London. During a security check, foreign currency amounting to USD 36,405 was found in his hand baggage. The currency was inventoried and handed over to Customs Authorities, who subsequently seized it, alleging that it was smuggled.

The appellant explained that he had legally earned the foreign currency while working in the USA after his retirement and had brought it to India for personal expenses. He claimed to have kept the remaining currency in a Federal Bank locker and was carrying it back to the USA to address a family medical emergency. He also stated that he was unaware of the Reserve Bank of India (RBI) regulations regarding foreign currency.

Despite providing bank statements and other evidence to support his claims, the Adjudicating Authority ordered the absolute confiscation of the foreign currency and imposed penalties. The First Appellate Authority upheld this decision, prompting the appellant to approach the CESTAT.

Key Arguments and Legal Provisions 

The appellant’s counsel argued that the foreign currency was not concealed and was legally acquired during his stay in the USA. He cited Section 6(4) and (5) of the Foreign Exchange Management Act (FEMA), 1999, which allows individuals to hold, own, transfer, or invest in foreign currency acquired while residing outside India. Additionally, the counsel pointed out that foreign currency is not a “notified item” under Section 123 of the Customs Act, placing the burden of proof on the Revenue to establish that the currency was obtained from unauthorized sources.

Another critical argument was the lack of jurisdiction of the investigating officer. The appellant’s counsel highlighted that, as per Notification S.O. 1156(E) dated December 26, 2000, only officers of Customs and Central Excise not below the rank of Deputy Commissioner are authorized to investigate such cases under FEMA. In this case, the investigation and statement recording were conducted by a Superintendent of Customs, which violated the legal provisions.

Tribunal’s Observations and Final Order

After hearing both parties and reviewing the evidence, the Tribunal found that the investigation was conducted by an officer who lacked the jurisdiction to do so. It emphasized that while empowered officers can seek assistance from subordinates, substantive powers such as seizure and statement recording cannot be delegated.

The Tribunal also noted that the appellant had provided sufficient evidence to prove the legal acquisition of the foreign currency, including bank statements from the USA. It ruled that the Revenue failed to establish that the currency was smuggled or obtained from unauthorized sources. Furthermore, the Tribunal referred to previous judgments, including the CESTAT Kolkata Bench decision in Appellant Vs The Commissioner of Customs (Airport and Administration), Kolkata, which emphasized that absolute confiscation is unwarranted when the offense is not proven and the individual is unaware of the regulations.

In light of these findings, the Tribunal allowed the appeal and granted consequential reliefs to the appellant.

Key Takeaways

This judgment underscores the importance of adhering to procedural requirements and respecting the jurisdictional authority of investigating officers. It also highlights the need for the Revenue to provide concrete evidence when alleging smuggling or unauthorized acquisition of foreign currency. The case serves as a reminder that justice prevails when the rule of law is upheld. Appellant’s victory is a testament to the importance of presenting a strong legal defense and the role of the judiciary in ensuring fairness and justice. This decision will undoubtedly serve as a precedent for similar cases in the future, reinforcing the principles of due process and legal compliance.

Source: CESTAT Hyderabad

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November 18, 2025
CESTAT Hyderabad- Chinese Coke Breeze Classified as Metallurgical Coke
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 11.11.2025

CESTAT Hyderabad- Chinese Coke Breeze Classified as Metallurgical Coke

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.

On November 6, 2025, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Regional Bench at Hyderabad delivered a significant judgment in the case of Jindal Steel & Power Ltd vs. Commissioner of Customs, Visakhapatnam. This case revolved around the classification of “Chinese Coke Breeze” and its eligibility for exemption under S.No.125 of Notification No.12/2012-Cus dated March 17, 2012.

The Background of the Case

Jindal Steel & Power Ltd (JSPL) operates an integrated steel plant in Raigarh, Chhattisgarh, which includes facilities such as a coke oven plant, sinter plant, and blast furnace. The company imported “Chinese Coke Breeze” under two Bills of Entry dated December 21, 2013, and January 30, 2014, claiming exemption from Basic Customs Duty and Additional Duty under the aforementioned notification. Initially, the exemption was granted, but upon further inquiry, the Customs Department argued that coke breeze does not qualify as “metallurgical coke” and issued a Show Cause Notice (SCN) demanding differential duty, confiscation of goods, and a penalty.

The department relied on technical literature, chemical examiner reports, and Board Circular No.56/2003 to assert that metallurgical coke and coke breeze are commercially understood as distinct products. The department argued that the exemption was only applicable to metallurgical coke, not coke breeze.

The Arguments Presented 

Appellant’s Arguments:
1. End-Use of Coke Breeze: JSPL argued that the exemption notification does not specify that only blast furnace coke qualifies as metallurgical coke. They contended that coke breeze, used in the sintering process to produce sinters for blast furnaces, is also metallurgical in nature.
2. Technical Literature: JSPL presented reports from the National Institute of Secondary Steel Technology (NISST) and other international studies, which supported the claim that coke breeze is a subset of metallurgical coke based on its end-use in metallurgical operations.
3. Sintering as a Metallurgical Process: JSPL emphasized that sintering is a critical metallurgical process used to agglomerate iron ore fines for blast furnace operations, and coke breeze plays a vital role as a fuel and reducing agent in this process.
4. Legal Precedents: JSPL cited various judgments, including ITC Ltd vs. CCE, Kolkata-IV and CCE, Bolpur vs. Ratan Melting & Wire Industries, to argue that the exemption notification should be interpreted based on its plain wording and end-use.
Department’s Arguments:
1. Strict Interpretation of Notification: The department argued that the exemption notification explicitly applies only to metallurgical coke, and coke breeze does not qualify.
2. Chemical Examiner’s Report: The department relied on the chemical examiner’s findings, which stated that coke breeze does not meet the technical parameters of metallurgical coke.
3. Commercial Understanding: The department emphasized that metallurgical coke and coke breeze are commercially understood as distinct products, with different properties and uses.
The Tribunal’s Observations and Final Decision

After hearing detailed arguments and reviewing technical literature, the Tribunal made the following key observations:
1. Definition of Metallurgical Coke: The Tribunal noted that there is no specific definition of “metallurgical coke” in the Customs Tariff or the exemption notification. Therefore, the term must be understood based on its plain meaning and end-use.
2. End-Use of Coke Breeze: The Tribunal agreed with JSPL’s argument that coke breeze, despite its smaller size, is used in the sintering process—a metallurgical operation—and subsequently in the blast furnace for steel production. This qualifies it as metallurgical coke.
3. Chemical Examiner’s Report: The Tribunal found that the chemical examiner’s conclusion was based on limited parameters and did not comprehensively evaluate the metallurgical properties of coke breeze.
4. Sintering as a Metallurgical Process: The Tribunal recognized sintering as an essential metallurgical process for iron and steel production, further supporting JSPL’s claim.
5. Notification Interpretation: The Tribunal held that the exemption notification should be interpreted based on its plain wording, which does not restrict the definition of metallurgical coke to blast furnace coke alone.
Final Verdict

The Tribunal ruled in favor of Jindal Steel & Power Ltd, holding that “Chinese Coke Breeze” qualifies as metallurgical coke under S.No.125 of Notification No.12/2012-Cus. Consequently, JSPL was entitled to the exemption, and the confiscation and penalty imposed by the adjudicating authority were set aside. The department’s cross-application was deemed infructuous and dismissed.

Key Takeaways
1. Importance of End-Use: The judgment highlights the significance of end-use in determining the classification and eligibility for exemptions under Customs notifications.
2. Holistic Evaluation: The Tribunal emphasized the need for a comprehensive evaluation of technical literature, standards, and industry practices to arrive at a fair conclusion.
3. Sintering as a Metallurgical Process: The recognition of sintering as a metallurgical process is a crucial aspect of this judgment, as it establishes the metallurgical nature of coke breeze.
4. Plain Reading of Notifications: The Tribunal reiterated that exemption notifications should be interpreted based on their plain wording, especially in the absence of specific definitions.
Conclusion

This landmark judgment sets a precedent for the interpretation of exemption notifications and the classification of goods based on their end-use. It underscores the importance of understanding technical and industry-specific nuances while adjudicating disputes in customs matters. The decision is a significant win for Jindal Steel & Power Ltd and provides clarity on the scope of “metallurgical coke” under the Customs Tariff.

Source: CESTAT Hyderabad

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November 11, 2025
CESTAT Hyderabad Sets Aside Revocation of Customs Broker License

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 13.10.2025

CESTAT Hyderabad 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.

In a significant judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has set aside the revocation of the Customs House Agent (CHA) license of M/s SK International. The case, which revolved around allegations of misdeclaration of goods during export, highlights the importance of due process and evidence in disciplinary actions against Customs Brokers.

Background of the Case

M/s SK International, a Customs House Agent, faced allegations of contravening several regulations under the Customs House Agents Licensing Regulations (CHALR), 2004, and Customs Brokers Licensing Regulations (CBLR), 2013. The accusations stemmed from their involvement in filing shipping bills for exporters allegedly attempting to export fertilizer items disguised as ‘Cephalexin Monohydrate’ to claim undue drawback benefits.

The Commissioner of Customs, Hyderabad, issued a Show Cause Notice (SCN) and subsequently revoked the CHA license of M/s SK International, citing violations of obligations under various regulations. Aggrieved by this decision, the appellant approached the Tribunal, challenging the legality of the revocation.

Source: CESTAT Hyderabad

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October 13, 2025
CESTAT Hyderabad- Carbon & Sulphur Analyzer Not Classifiable as Gas Analysis Apparatus

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 30.09.2025

CESTAT Hyderabad- Carbon & Sulphur Analyzer Not Classifiable as Gas Analysis Apparatus

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, and Service Tax Appellate Tribunal (CESTAT) Regional Bench at Hyderabad has resolved a long-standing classification dispute concerning the import of the ‘Carbon and Sulphur Analyzer CS-800’ by Verder Scientific Pvt Ltd. The case revolved around whether the apparatus should be classified under Customs Tariff Heading (CTH) 90271000 as a ‘Gas or Smoke Analysis Apparatus’ or under a different heading. The Tribunal’s decision has set a precedent for similar classification disputes in the future.

Background of the Case

The appellant, Verder Scientific Pvt Ltd, challenged the classification of their imported analyzer under CTH 90271000, as upheld by the Commissioner of Customs (Appeals). The apparatus in question is used to determine the presence of carbon and sulphur elements in solid metal samples. The Commissioner (Appeals) had classified the product as a ‘Gas or Smoke Analysis Apparatus,’ arguing that the apparatus analyzes gases released during the combustion of metal samples.

Source: CESTAT Hyderabad

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September 30, 2025
CESTAT Hyderabad Rules in Favor of PH Jewels in Gold Export Obligation Dispute

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 09.09.2025

CESTAT Hyderabad Rules in Favor of PH Jewels in Gold Export Obligation 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, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has set aside the order passed by the Principal Commissioner of Customs, Hyderabad, in the case involving PH Jewels and Appellant. This decision, pronounced on September 8, 2025, brings clarity to the interpretation of exemption notifications under the Customs Act, 1962, and provides relief to the appellants.

Background of the Case

The case revolved around the alleged diversion of 25 kg of duty-free gold imported by PH Jewels under Notification No. 57/2000-Cus dated 8.5.2000. The Directorate General of Revenue Intelligence (DRI) had issued a Show Cause Notice (SCN) in 2017, claiming that PH Jewels had sold the imported gold in the domestic market instead of using it to manufacture jewelry for export. The Principal Commissioner of Customs subsequently passed an order confirming the demand for customs duty, interest, and penalties on PH Jewels and Appellant.

Source: CESTAT Hyderabad

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September 9, 2025
CESTAT Hyderabad Sets Aside Confiscation of Imported Stainless Steel Scrap

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 05.09.2025

CESTAT Hyderabad Sets Aside Confiscation of Imported Stainless Steel Scrap

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, and Service Tax Appellate Tribunal (CESTAT), Hyderabad, has delivered justice to Jindal Stainless Ltd by setting aside the confiscation, redemption fine, and penalty imposed by the Principal Commissioner of Customs, Visakhapatnam. This case highlights the importance of interpreting laws and policies in a practical and fair manner, especially when procedural challenges arise.

Background of the Case

Jindal Stainless Ltd, a leading steel manufacturer, imported 500.74 MT of stainless steel scrap of 304 grade from Turkey under two Bills of Entry dated December 3, 2014, and December 8, 2014. As per the Foreign Trade Policy (FTP) and Handbook of Procedures, metallic waste and scrap in unshredded, compressed, and loose form can only be imported if accompanied by a pre-shipment inspection certificate issued by an authorized agency. However, the Directorate General of Foreign Trade (DGFT) had not notified any agency in Turkey for such inspections. Faced with this practical challenge, Jindal Stainless Ltd obtained the certificate from M/s Worldwide Inspection Services – SARL, Benin, an agency authorized by DGFT but not specifically for Turkey.

Upon arrival at Visakhapatnam port, the imported scrap was examined by M/s Valueguru Chartered Engineers, Surveyors, Valuers, who issued a post-shipment inspection certificate confirming the goods were in order. Despite this, the Principal Commissioner of Customs confiscated the goods under Section 111(d) of the Customs Act, 1962, imposed a redemption fine of Rs. 40,00,000, and levied a penalty of Rs. 10,00,000 under Section 112(a).

Source: CESTAT Hyderabad

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September 5, 2025