𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Tag: #LegalView

CESTAT Chennai Dismisses Revenue Appeal Over Non-Issuance of Show Cause Notice: Upholds Principles of Natural Justice
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 26.02.2026

CESTAT Chennai Dismisses Revenue Appeal Over Non-Issuance of Show Cause Notice: Upholds Principles of Natural Justice

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), Chennai, recently delivered its Final Order No. 40284/2026 on February 23, 2026, concerning Customs Appeal No. 40943 of 2016 and Customs Cross Appeal No. 40945 of 2016. This case revolved around a dispute between the Commissioner of Customs, Chennai VII Commissionerate, and M/s. Larsen & Toubro Ltd. regarding the classification and differential duty demand on imported goods.

Background of the Case

The case originated from an Order-in-Appeal (C.Cus.I. No. 705/2015) dated October 30, 2015, issued by the Commissioner of Customs (Appeals-I). The Revenue filed an appeal against this order, claiming that the Appellate Authority failed to consider the fact that a show cause notice had been issued within the stipulated time. The Revenue argued that the Commissioner (Appeals) had set aside the lower authority’s order based on the alleged non-issuance of a show cause notice, which they claimed was a misrepresentation of facts by the importer.

On the other hand, M/s. Larsen & Toubro Ltd. filed a cross-appeal, denying the allegations made by the Revenue. They contended that no show cause notice was ever issued to them, and the Order-in-Original was issued in violation of the principles of natural justice. They also argued that the differential duty demand was time-barred and that the imported item—a specialized orthopedic table—was misclassified by the Department.

Key Issues in the Case

The primary issue before the Tribunal was whether a show cause notice was issued and served on M/s. Larsen & Toubro Ltd. for re-determining the classification of the imported goods, which were described as “Operating Table Orthopaedics Hydraulic with Remote Model No. YSAMMITZ RC40 (Medical Equipment).” The importer had classified the goods under CTH No. 90189099 as “other Medical Equipment and Appliances,” while the Department argued that the goods should be classified under CTH 9402, resulting in a differential duty demand of Rs. 4,89,431.

Tribunal’s Observations and Findings
1. Absence of Show Cause Notice: The Tribunal noted that the Department failed to produce any evidence of the issuance or service of a show cause notice, despite asserting its existence. Section 28(1) of the Customs Act mandates the issuance of a notice within one year of the relevant date if the classification is proposed to be revised, which was not adhered to in this case.
2. Misapplication of Section 28(2): The Original Authority had invoked Section 28(2) of the Customs Act, which provides for the waiver of a show cause notice under specific conditions, such as the payment of duty and interest by the importer. However, the Commissioner (Appeals) found that these preconditions were not met, and the invocation of Section 28(2) was incorrect.
3. Violation of Principles of Natural Justice: The Tribunal emphasized that the absence of a show cause notice was a clear violation of the principles of natural justice. The Respondent was not given an opportunity to present their case, which is a fundamental requirement under Section 28(1) of the Customs Act.
4. Failure to Provide Evidence: Despite being given ample time—nearly ten years—the Department failed to produce the alleged show cause notice, even during the hearing before the Tribunal. This failure undermined the Revenue’s appeal and confirmed the absence of the notice.
Final Decision

After thoroughly examining the records and hearing arguments from both sides, the Tribunal concluded that the Revenue’s appeal lacked merit. The absence of a show cause notice was deemed fatal to the case, and the Tribunal upheld the Order-in-Appeal issued by the Commissioner (Appeals). Consequently, the Revenue’s appeal was dismissed.

Key Takeaways
1. Importance of Adhering to Legal Procedures: The case highlights the critical importance of following legal procedures, such as issuing and serving a show cause notice, to ensure compliance with the principles of natural justice.
2. Burden of Proof: The burden of proving the issuance and service of a show cause notice lies with the Department. Failure to provide evidence can lead to the dismissal of the appeal.
3. Timely Action: The Tribunal emphasized the importance of adhering to statutory timelines, as the notice for personal hearing was issued beyond the one-year limitation period prescribed under Section 28(1).
4. Misapplication of Legal Provisions: The case underscores the need for authorities to correctly apply legal provisions, as the misapplication of Section 28(2) weakened the Department’s position.
Conclusion

The Final Order No. 40284/2026 serves as a reminder of the significance of procedural compliance and the principles of natural justice in customs-related disputes. It also highlights the necessity for authorities to substantiate their claims with concrete evidence, especially when challenging decisions made by appellate bodies. This case sets a precedent for similar disputes and reinforces the importance of transparency and accountability in the adjudication process.

Listen to this on our #YouTube Channel

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 26, 2026
CESTAT Delhi Set aside the penalty imposed under Section 114A of the Customs Act, 1962
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 26.02.2026

CESTAT Delhi Set aside the penalty imposed under Section 114A of the Customs Act, 1962

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 & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, recently delivered a significant judgment in the case of M/s Allengers Medical Systems Ltd. vs. Commissioner of Customs (Customs Appeal No. 51218 of 2025). This case revolved around the imposition of penalty under Section 114A of the Customs Act, 1962, and the eligibility of exemption under Notification No. 50/2017-CUS, as amended by Notification No. 2/2022-CUS.

Background of the Case

M/s Allengers Medical Systems Ltd., a company based in Mohali, Punjab, imported Carbon Fiber Table Tops and Carbon Fiber Tables under various Bills of Entry between August 18, 2022, and March 9, 2023. The company self-assessed the customs duty, claiming exemption under Notification No. 50/2017-CUS, as amended by Notification No. 2/2022-CUS (Sl. No. 564). However, the Customs Department contended that the amendment excluded carbon fiber tables from the exemption, leading to a demand for differential customs duty of Rs. 57,18,554/- along with interest. Additionally, a penalty of Rs. 57,18,554/- was imposed under Section 114A of the Customs Act, 1962.

The appellant argued that the exemption notification excluded only diagnostic tables, while the imported goods were interventional tables, which were not excluded. Despite this, the appellant paid the demanded duty and interest before the issuance of the Show Cause Notice (SCN) dated June 6, 2024, in an attempt to resolve the matter. However, the SCN also proposed penalties under Section 114A, which the appellant contested in the appeal.

Key Legal Issue

The primary issue before the Tribunal was whether the penalty imposed under Section 114A of the Customs Act was justified in the given circumstances. Section 114A stipulates that penalties can be imposed for non-payment or short payment of duty due to collusion, wilful misstatement, or suppression of facts.

Tribunal’s Observations and Decision

The Tribunal carefully examined the submissions made by both parties. The appellant argued that the self-assessment of duty was based on its understanding of the exemption notification, and there was no collusion, wilful misstatement, or suppression of facts. The appellant maintained that it was eligible for the exemption but chose not to contest the demand for duty and interest to settle the matter amicably.

The Tribunal noted that the remedy for incorrect self-assessment is re-assessment, and an incorrect self-assessment cannot automatically be deemed as collusion, wilful misstatement, or suppression of facts. The appellant had acted in good faith, believing it was entitled to the exemption, and had voluntarily paid the duty and interest before the issuance of the SCN. Therefore, the Tribunal concluded that the penalty under Section 114A was not justified in this case.

Final Order

The Tribunal allowed the appeal and modified the impugned order by setting aside the penalty imposed under Section 114A of the Customs Act. The appellant was granted consequential relief, and the judgment was pronounced in open court.

Key Takeaways from the Judgment
1. Self-Assessment vs. Re-Assessment: The Tribunal clarified that incorrect self-assessment does not automatically imply collusion, wilful misstatement, or suppression of facts. The proper remedy for incorrect self-assessment is re-assessment.
2. Good Faith Actions: The appellant’s voluntary payment of duty and interest before the issuance of the SCN demonstrated its intent to resolve the matter amicably, which played a crucial role in the Tribunal’s decision to set aside the penalty.
3. Penalty under Section 114A: The judgment emphasized that penalties under Section 114A can only be imposed if there is evidence of collusion, wilful misstatement, or suppression of facts. In the absence of such evidence, penalties cannot be justified.
4. Importance of Clear Notifications: The case highlights the need for clarity in exemption notifications to avoid disputes and misinterpretations.
Conclusion

The decision in the M/s Allengers Medical Systems Ltd. case serves as a significant precedent in interpreting Section 114A of the Customs Act, 1962. It underscores the importance of distinguishing between genuine errors in self-assessment and deliberate acts of evasion. This judgment is a reminder to importers and businesses to act in good faith and ensure compliance with customs regulations while also advocating for clear and unambiguous notifications to prevent unnecessary litigation.

Source: CESTAT Delhi

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 26, 2026
CESTAT Chennai Orders Interest on 12-Year Delayed Refunds
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 25.02.2026

CESTAT Chennai Orders Interest on 12-Year Delayed Refunds

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), Chennai, recently delivered a significant judgment in the case of M/s. RBF Rig Corporation LLC v. Commissioner of Customs, addressing the issue of interest on delayed refunds under Section 27A of the Customs Act, 1962. This decision, pronounced on February 23, 2026, has set a precedent for the interpretation of statutory provisions governing interest on delayed refunds, emphasizing the importance of timely adjudication and fairness in tax administration.

Background of the Case

M/s. RBF Rig Corporation LLC, engaged in petroleum drilling operations, imported 28 consignments of equipment and spares between July 2002 and November 2002 under a contract with ONGC. The imports were made under Notification No. 21/2002-Cus, which required the production of Essentiality Certificates (ECs) from the Directorate General of Hydrocarbons (DGH). Due to delays in the issuance of ECs, the goods were cleared on payment of customs duty under protest.

Following the issuance of ECs in early 2003, the Appellant filed refund applications for the customs duty paid under protest. However, these applications were rejected by the Assistant Commissioner in 2005–06 on the grounds that the assessments were not challenged. The rejection was upheld by the Commissioner (Appeals) in May 2006.

The Appellant pursued the matter further, and in 2014, the Tribunal set aside the rejection and remanded the case for fresh adjudication. Subsequently, the adjudicating authority reassessed 15 Bills of Entry and sanctioned refunds in November 2015. However, the Appellant’s claim for interest on the delayed refund was denied, leading to the present appeal.

Key Issues for Determination 

The Tribunal identified two critical issues for consideration:
1. Whether interest under Section 27A of the Customs Act, 1962 is payable from the expiry of three months from the date of the original refund applications filed during January–March 2003.
2. Whether interest can be denied on the ground that the refund was granted only pursuant to appellate orders passed subsequently.
Tribunal’s Observations and Findings

The Tribunal meticulously analyzed the facts of the case, statutory provisions, and judicial precedents to arrive at its decision. Below are the key observations and findings:
1. Mandatory Nature of Section 27A: The Tribunal emphasized that Section 27A of the Customs Act, 1962 is unambiguous and mandatory. It stipulates that interest must be paid if a refund is not granted within three months from the date of receipt of the refund application. The provision does not allow discretion to the authorities once the stipulated conditions are met.
2. Starting Point for Interest Calculation: The Tribunal relied on the landmark judgment of the Hon’ble Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India (2011), which held that the starting point for interest calculation is the expiry of three months from the date of the original refund application, irrespective of subsequent appellate orders. The Tribunal found this principle directly applicable to the present case.
3. Department’s Erroneous Actions: The Tribunal rejected the Revenue’s argument that the refund became “due” only after the appellate order in 2015. It held that the delay in granting the refund was entirely attributable to the Department’s erroneous actions and prolonged adjudicatory process. The Department cannot use its own mistakes to deny statutory interest.
4. Consistency in Tax Administration: The Tribunal noted that the Department had granted interest from 2003 onwards for the remaining 13 Bills of Entry arising from the same set of imports and refund applications. Denying interest for the other 15 Bills of Entry was deemed discriminatory and contrary to the principles of consistency and fairness.
5. Compensatory Nature of Interest: The Tribunal reiterated that interest under Section 27A is compensatory in nature, intended to reimburse the assessee for the loss of use of money lawfully due. Procedural requirements or internal departmental processes cannot override this statutory mandate.
Final Decision

The Tribunal held that the Appellant is entitled to interest under Section 27A of the Customs Act, 1962, from the expiry of three months after the filing of the original refund applications in 2003 until the date of actual refund in 2015. The impugned Order-in-Appeal dated September 29, 2016, was set aside, and the adjudicating authority was directed to compute and pay the interest within three months from the receipt of the Tribunal’s order.

Implications of the Judgment

This decision has far-reaching implications for taxpayers and the Revenue Department. It reinforces the principle that statutory provisions governing interest on delayed refunds are mandatory and cannot be overridden by procedural delays or departmental errors. The judgment also underscores the importance of consistency and fairness in tax administration, ensuring that taxpayers are not subjected to discriminatory treatment.

Conclusion

The CESTAT Chennai’s judgment in the RBF Rig Corporation LLC case is a significant development in Indian customs law. It provides clarity on the interpretation of Section 27A of the Customs Act, 1962, and serves as a reminder to the Revenue Department to adhere to statutory timelines for processing refund claims. This decision is a victory for taxpayers, ensuring that they are fairly compensated for delays caused by administrative lapses.

Listen to this on our #YouTube Channel

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 25, 2026
CESTAT Mumbai Overturns Revocation of Customs Broker License
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 25.02.2026

CESTAT Mumbai Overturns Revocation of Customs Broker License

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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of Fairdeal Shipping Agency Private Limited vs. Principal Commissioner of Customs (General), setting aside the revocation of the Customs Broker (CB) license of the appellant, forfeiture of their security deposit, and imposition of penalties. The case revolved around alleged violations of the Customs Brokers Licensing Regulations (CBLR), 2013/2018, specifically Regulation 10(d).

Background of the Case

Fairdeal Shipping Agency Private Limited, a Customs Broker holding a regular CB license issued under the Customs Brokers Licensing Regulations (CBLR), 2018, filed an appeal against the Order-in-Original CAO No. 19/CAC/PCC(G)/SJ/Adj-CBS dated 25.06.2024. The order, passed by the Principal Commissioner of Customs (General), New Custom House, Mumbai, revoked the CB license, forfeited the security deposit, and imposed penalties on the appellant for alleged violations of CBLR regulations.

The case originated from an offence report in the form of a Show Cause Notice (SCN) dated 28.02.2018, which alleged that the appellant had facilitated an importer, M/s Adler Mediequip Private Limited, in evading customs duty on the import of ‘Titanium alloy’ by claiming ineligible exemption benefits under Notification No. 50/2017-Customs dated 30.06.2017. The SCN alleged that the appellant violated Regulations 11(d), 11(e), and 11(f) of CBLR, 2013/2018.

Proceedings and Allegations 

The Principal Commissioner of Customs (General) initially suspended the CB license of the appellant under Regulation 16(1) of CBLR, 2018, and continued the suspension through subsequent orders. The appellant challenged the suspension before the Tribunal, which revoked the suspension in its Final Order No. A/85474/2019 dated 14.02.2019. The department’s appeal against this revocation was dismissed by the Hon’ble High Court of Bombay in its judgment dated 22.06.2023.

Following the completion of inquiry proceedings, the Principal Commissioner of Customs (General) passed the impugned order, concluding that the appellant had violated Regulation 10(d) of CBLR, 2018, by failing to advise the importer to comply with customs regulations and not informing customs authorities about discrepancies in the importer’s claims for duty exemption.

Appellant’s Defense

The appellant contended that they had acted in good faith and followed the instructions of the importer, relying on the importer’s previous declarations and registration with local Central Excise authorities. They argued that they had no reason to doubt the eligibility of the exemption claimed by the importer, as similar imports had been cleared by customs authorities in the past. The appellant also emphasized that they had prepared checklists and informed the importer about the correct classification and applicable duty before filing the Bills of Entry (B/Es).

The appellant further argued that the Principal Commissioner had already dropped charges related to violations of Regulations 10(e) and 10(f) of CBLR, 2018, and that the remaining charge under Regulation 10(d) was not sustainable. They relied on several judicial precedents, including Union of India vs. Naman Singh Sekhawat and Northern Plastic Limited vs. Collector of Customs & Central Excise, to support their case.

Tribunal’s Observations and Judgment

After hearing both sides and reviewing the case records, the Tribunal made the following key observations:
1. Contradictions in the Impugned Order: The Tribunal noted apparent contradictions in the findings of the Principal Commissioner. On one hand, the Commissioner concluded that the CB failed to verify the eligibility criteria for the exemption benefit and inform customs authorities about discrepancies. On the other hand, the Commissioner acknowledged that the exemption benefit was a matter of interpretation that could only be determined during customs examination, which was beyond the scope of the CB’s obligations under CBLR.
2. No Evidence of Violation: The Tribunal found that the customs authorities had cleared the imported goods under the exemption benefit during the relevant period, and the appellant CB had acted based on the importer’s instructions and documents. The Tribunal held that the CB could not be faulted for failing to advise the importer or inform customs authorities about discrepancies, as the exemption benefit was being extended by the customs authorities themselves.
3. Principles of Natural Justice: The Tribunal observed that the Principal Commissioner had provided sufficient opportunity to the appellant to present their case, and there was no violation of the principles of natural justice.
4. Timelines Under CBLR: While the inquiry proceedings were delayed, the Tribunal noted that the delay was partly due to litigation initiated by the appellant and that the Hon’ble High Court of Bombay had held that the timelines under CBLR are directory in nature and not mandatory.
5. Judicial Precedents: The Tribunal referred to its earlier judgment in the case of the same appellant (Final Order No. A/85474/2019 dated 14.02.2019), which held that determining the eligibility for exemption is the responsibility of the customs authorities and not the CB. The Tribunal also cited the Supreme Court’s judgment in Northern Plastic Limited vs. Collector of Customs & Central Excise, which stated that a declaration of goods based on the importer’s belief cannot be considered a misdeclaration under the Customs Act.
Final Decision

Based on the above analysis, the Tribunal concluded that the Principal Commissioner’s findings were not supported by evidence or factual details. The Tribunal held that the appellant CB had not violated Regulation 10(d) of CBLR, 2018, and set aside the impugned order. Consequently, the revocation of the CB license, forfeiture of the security deposit, and imposition of penalties were deemed unsustainable.

Conclusion

The judgment in Fairdeal Shipping Agency Private Limited vs. Principal Commissioner of Customs (General) is a landmark decision that underscores the importance of adhering to the principles of natural justice and ensuring that allegations against Customs Brokers are substantiated with clear evidence. The Tribunal’s decision reaffirms that the responsibility for determining duty exemptions lies with customs authorities, and Customs Brokers cannot be held liable for the misinterpretation of exemption benefits by importers. This case serves as a reminder of the need for fair and transparent adjudication processes in customs-related matters.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 25, 2026
CESTAT Chennai Overturns Confiscation and Penalty on Import of Second-Hand Digital Multifunction Machines
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.02.2026

CESTAT Chennai Overturns Confiscation and Penalty on Import of Second-Hand Digital Multifunction 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.

In a landmark decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, has delivered justice to M/s. Jaya Trading Company in a long-standing legal battle concerning the import of second-hand digital multifunction print and copying machines. The case, which dates back to 2009, has finally been resolved in favor of the appellant, setting a precedent for similar cases in the future.

Background of the Case

M/s. Jaya Trading Company, a Delhi-based importer and trader of second-hand digital multifunction print and copying machines, filed a Bill of Entry No. 321038 on September 29, 2009, at Chennai Port for a consignment of old and used machines. The goods were declared at a value of EUR 16,490/- (C&F) based on the supplier’s invoice. However, the Customs Department ordered a first-check examination and valuation by an approved Chartered Engineer, who appraised the value at EUR 20,923/- (C&F). To avoid demurrage and detention charges, the company accepted the enhanced value for assessment and paid the duty, while disputing the licensing objection raised by the Department.

The Additional Commissioner of Customs passed an Order-in-Original on October 9, 2009, rejecting the declared value, adopting the Chartered Engineer’s valuation, and confiscating the goods under Section 111(d) of the Customs Act read with Section 3(3) of the Foreign Trade (Development and Regulation) Act (FTDR Act). The order also imposed a redemption fine of ₹4,49,000/- and a penalty of ₹1,50,000/- under Section 112(a) of the Customs Act.

Legal Proceedings

The Appellant filed an appeal on January 29, 2010, before the Commissioner of Customs (Appeals-II), Chennai. Although the appeal was admitted and heard on merits in April 2010, it remained pending due to similar cases being under consideration by the Hon’ble Madras High Court. The High Court later ruled in favor of importers in cases such as City Office Equipment and Sai Graphics Systems, holding that second-hand digital multifunction print and copying machines were freely importable prior to June 5, 2012, and that the amendment to Para 2.17 of the Foreign Trade Policy was prospective.

Despite this settled legal position, the Commissioner (Appeals) rejected the Appellant’s appeal in May 2016, citing limitation issues and treating the date of dispatch as the date of service. This decision was made without examining the merits of the case or providing notice to the Appellant.

CESTAT Chennai’s Final Order 

The case was brought before the CESTAT Chennai, where the Appellant challenged the rejection of their appeal on the grounds of limitation and the legality of the confiscation, redemption fine, and penalty imposed by the Customs Department.

After a thorough examination of the case records, statutory provisions, and relevant case laws, the Tribunal delivered its final order on February 19, 2026. The key findings and rulings are as follows:
1. Appeal Not Barred by Limitation: The Tribunal held that the Commissioner (Appeals) erred in rejecting the appeal on the ground of limitation. Section 128 of the Customs Act, 1962, clearly states that the limitation period is to be calculated from the date of communication of the order, not the date of dispatch. Since the Appellant received the Order-in-Original on November 3, 2009, and filed the appeal on January 29, 2010, the appeal was well within the condonable period. The rejection of the appeal after six years without notice was deemed legally unsustainable and violative of natural justice.
2. Importability of Second-Hand Digital Multifunction Machines: The Tribunal reaffirmed the legal position established by the Hon’ble Madras High Court that second-hand digital multifunction print and copying machines were freely importable under Para 2.17 of the Foreign Trade Policy prior to June 5, 2012. The restriction introduced on this category of goods was prospective and did not apply to imports made in September 2009.
3. Confiscation Under Section 111(d): The Tribunal found that the confiscation of goods under Section 111(d) of the Customs Act was unsustainable, as the imported goods were freely importable at the time of import.
4. Valuation and Section 111(m): The Tribunal observed that the enhancement of value was based solely on the Chartered Engineer’s estimation, without any evidence of undervaluation, forged invoices, or suppression. As such, confiscation under Section 111(m) was not warranted.
5. Redemption Fine and Penalty: Since the goods were not liable for confiscation, the Tribunal held that the redemption fine under Section 125 and penalty under Section 112(a) of the Customs Act were also unsustainable. The import was made under a bona fide belief, supported by the prevailing policy and judicial pronouncements, with no evidence of mens rea or contumacious conduct.
Conclusion

The CESTAT Chennai’s decision to set aside the impugned orders and allow the appeal on merits is a significant victory for M/s. Jaya Trading Company. The Tribunal’s ruling not only provides relief to the Appellant but also reinforces the settled legal position regarding the importability of second-hand digital multifunction print and copying machines prior to June 5, 2012.

Listen to this on our #YouTube Channel

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 24, 2026
CESTAT Mumbai Confirms IGST rate of 18% for imported monitors
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.02.2026

CESTAT Mumbai Confirms IGST rate of 18% for imported monitors

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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of M/s Wipro GE Healthcare Pvt. Ltd. vs Commissioner of Customs (Import), Mumbai-III. This case revolved around the classification and applicable Integrated Goods and Services Tax (IGST) rate on imported “LCD HB Colour Monitors without Stand, of size 19 inch,” which were intended for use with medical equipment such as ultrasound machines, X-ray machines, CT scanners, and MRI systems.

Background of the Case

The appellants, M/s Wipro GE Healthcare Pvt. Ltd., imported LCD monitors through the Air Cargo Complex in Mumbai between December 2018 and February 2021. They classified these monitors under Customs Tariff Heading (CTH) 8528 and self-assessed the IGST payable at 18%, as applicable to computer monitors under Serial Nos. 383C and 384 of Schedule-III to Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017.

However, during a post-clearance audit, the Customs Department raised objections to this classification. The department argued that the monitors were not designed for use with computers or Automatic Data Processing (ADP) machines but were specifically designed for use with medical equipment. As a result, the department proposed reclassifying the monitors under a different tariff heading, which would attract a higher IGST rate of 28% under Serial No. 154 of Schedule-IV of the same notification.

Show Cause Notices (SCNs) were issued to the appellants, demanding differential customs duty and proposing penalties and confiscation of goods. The Original Authority upheld the department’s classification and confirmed the demand for additional IGST. However, upon appeal, the Commissioner of Customs (Appeals) set aside the original orders and remanded the matter back to the original authority for fresh adjudication.

Key Issues in the Case

The primary issue before the Tribunal was to determine the correct classification and IGST rate applicable to the imported monitors. Additionally, the Tribunal had to decide whether the Commissioner (Appeals) was justified in remanding the matter to the original authority, especially when a similar case involving Philips India Limited vs Commissioner of Customs (Import), ACC, Mumbai had already been conclusively decided by the Tribunal and upheld by the Hon’ble Supreme Court.

Arguments Presented

Appellant’s Arguments:
1. Precedent from Philips India Case: The appellants argued that the facts of their case were identical to the Philips India Limited case, where the Tribunal had ruled in favor of the assessee, classifying similar monitors under CTH 8528 5200 and applying an IGST rate of 18%.
2. Error in Remanding the Case: The appellants contended that the Commissioner (Appeals) erred in treating the Tribunal’s decision in the Philips India Limited case as “additional evidence” under Rule 5 of the Customs (Appeals) Rules, 1982. They argued that judicial decisions are not “documentary evidence” but binding precedents that should have been applied directly.
3. Compliance with Notification: The appellants demonstrated that the imported monitors met the criteria for the concessional IGST rate under Serial Nos. 383C and 384 of Notification No. 01/2017-IT(Rate), as they were classifiable under sub-heading 8528 52 and were capable of being connected to ADP machines.
Respondent’s Arguments:

The Revenue argued that the Commissioner (Appeals) was correct in remanding the matter to the original authority for fresh adjudication, as the Tribunal’s decision in the Philips India Limited case was not available during the original proceedings.

Tribunal’s Observations and Decision

After hearing both sides and reviewing the case records, the Tribunal made the following observations:
1. Identical Case Already Decided: The Tribunal noted that the facts of the present case were identical to the Philips India Limited case, which had been conclusively decided by the Tribunal and upheld by the Hon’ble Supreme Court. The issue was no longer res integra.
2. Judicial Precedent is Binding: The Tribunal emphasized that judicial decisions are not “additional evidence” under Rule 5 of the Customs (Appeals) Rules, 1982. It cited judgments from the Hon’ble High Courts of Telangana and Bombay, which clarified that court decisions are binding and not subject to the procedural requirements for admitting additional evidence.
3. Error in Remanding the Case: The Tribunal held that the Commissioner (Appeals) should have decided the matter on merits, following the binding precedent set by the Tribunal in the Philips India Limited case. The remand was deemed unnecessary and incorrect.
4. Finality of the Issue: The Tribunal reiterated that the IGST rate of 18% was appropriate for the imported monitors, as per the settled position of law established in the Philips India Limited case and upheld by the Supreme Court.
Final Order

The Tribunal set aside the impugned orders of the Commissioner (Appeals) and allowed the appeals in favor of M/s Wipro GE Healthcare Pvt. Ltd. The decision reaffirmed the importance of judicial discipline and the binding nature of precedents in ensuring consistency and fairness in legal proceedings.

Key Takeaways
1. Judicial Precedents Are Binding: The case highlights the importance of adhering to established judicial precedents to maintain consistency and avoid unnecessary litigation.
2. Classification of Goods: The decision underscores the significance of accurate classification of goods for determining applicable tax rates, especially in cases involving specialized equipment.
3. Legal Interpretation of Evidence: The Tribunal clarified that court judgments cannot be treated as “additional evidence” under Rule 5 of the Customs (Appeals) Rules, 1982, as they are binding legal precedents.
Conclusion

The judgment in the M/s Wipro GE Healthcare Pvt. Ltd. case is a landmark decision that reinforces the principles of judicial discipline and the binding nature of precedents. It serves as a reminder to adjudicating authorities to consider settled legal positions and avoid unnecessary remands, ensuring a more efficient and fair resolution of disputes. This case also provides valuable insights into the complexities of customs classification and the application of IGST rates, particularly for specialized goods like medical equipment.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 24, 2026
Orissa High Court Ruled on Applicability of WMT vs DMT Basis for Iron Ore Export Duty Assessment
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 23.02.2026

Orissa High Court Ruled on Applicability of WMT vs DMT Basis for Iron Ore Export Duty Assessment

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.

On January 15, 2026, the Orissa High Court delivered a significant judgment in the case of OTAPL No. 50 of 2025, which revolved around the assessment of customs duty on exported iron ore fines. This case highlights the complexities of customs law, the importance of adhering to established legal principles, and the role of substantial questions of law in appellate proceedings. Below, we delve into the details of the case, the arguments presented, and the court’s reasoning behind its decision.

Background of the Case

The case originated from an appeal filed by the Commissioner of Customs (Preventive), Bhubaneswar, under Section 130 of the Customs Act, 1962. The appeal challenged the Final Order No. 77815/2024, dated December 4, 2024, passed by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata. The dispute centered around the determination of customs duty on iron ore fines exported by M/s. Essel Mining and Industries Ltd. under two shipping bills dated March 3, 2021, and March 6, 2021.

The primary issue was whether the iron content (Fe content) of the exported iron ore fines should be calculated on a Wet Metric Tonne (WMT) basis or a Dry Metric Tonne (DMT) basis for customs duty assessment. The case also involved the validity of test reports from two different laboratories: the Central Revenues Control Laboratory (CRCL), Kolkata, and M/s. Mitra S.K. Private Ltd. (SKM), an NABL-accredited private testing agency.

Key Questions of Law

The Revenue raised several questions of law for adjudication, including:
1. Whether the CESTAT was correct in dismissing the appeal filed by the Department against the Order-in-Appeal dated June 9, 2023, passed by the Commissioner (Appeals), Bhubaneswar.
2. Whether the test report from the NABL-accredited private testing agency (SKM) could be accepted for customs duty assessment, given that the samples were drawn solely by the exporter without the presence of Customs officials.
3. Whether the CESTAT was justified in discarding the CRCL test report, which was based on representative samples drawn in the presence of Customs officials, in favor of the SKM test report.
4. Whether the CESTAT was correct in determining the Fe content of the iron ore fines on a WMT basis, as opposed to a DMT basis.
Arguments Presented

For the Appellant (Revenue): 
- The CRCL test report, based on samples drawn in the presence of Customs officials, should have been given precedence over the SKM report.
- The SKM report was based on samples drawn solely by the exporter, which lacked credibility and violated CBIC Circular No. 12/2014-Cus, dated November 17, 2014.
- The CRCL test report, which calculated Fe content on a DMT basis, was more accurate and should have been used for customs duty assessment.
For the Respondent (M/s. Essel Mining and Industries Ltd.): 
- The SKM test report was based on samples drawn at the time of export and reflected the condition of the goods at the time of export, as required by law.
- The CRCL test report was based on samples tested after a significant delay, leading to evaporation of moisture and a higher Fe content on a DMT basis.
- The contract between the exporter and the foreign buyer specified that the Fe content of the iron ore fines should be less than 58% on a WMT basis, and payments were made accordingly.
Court’s Analysis and Judgment 

The Orissa High Court meticulously analyzed the arguments and evidence presented by both parties. The court’s judgment focused on the following key points:
1. Determination of Fe Content:
  - The court upheld the principle that the Fe content of exported goods should be calculated based on their condition at the time of export, which includes moisture and other impurities. This aligns with the legal position established in previous judgments, including Union of India v. Gangadhar Narsingdas Agrawal.
2. Validity of Test Reports:
  - The court found no reason to discard the SKM test report, as it was based on samples drawn at the time of export and reflected the condition of the goods in their natural form. The CRCL test report, on the other hand, was based on samples tested after a significant delay, which could have affected the accuracy of the results.
3. Transaction Value:
  - The court emphasized that the valuation of exported goods should be based on the transaction value, as per Section 14 of the Customs Act. In this case, the transaction value was determined based on the SKM test report, which was consistent with the terms of the contract between the exporter and the foreign buyer.
4. Substantial Question of Law:
  - The court concluded that the questions raised by the Revenue were primarily based on factual findings and did not constitute “substantial questions of law” as required under Section 130 of the Customs Act. The court cited several precedents to support its decision, including Santosh Hazari v. Purushottam Tiwari and Hero Vinoth v. Seshammal.
Conclusion

The Orissa High Court dismissed the appeal filed by the Revenue, affirming the concurrent findings of fact by the Appellate Authority and the CESTAT. The court held that the Fe content of the iron ore fines exported should be calculated on a WMT basis, as per the legal position prevailing at the time of export. The judgment underscores the importance of adhering to established legal principles and the limited scope of appellate jurisdiction under Section 130 of the Customs Act.

Listen to this on our #YouTube Channel

Source: Orissa High Court

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 23, 2026
CESTAT Mumbai Overturns Customs Valuation
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 23.02.2026

CESTAT Mumbai Overturns Customs Valuation

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 & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of Kumar Mahendra Exim vs. Commissioner of Customs (Imports), Mumbai (Customs Appeal No. 86769 of 2016). This case highlights critical aspects of customs valuation, reassessment, and the importance of adhering to legal provisions under the Customs Act, 1962, and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Background of the Case

The appellant, M/s Kumar Mahendra Exim, filed a Bill of Entry (B/E) No. 9278749 dated 11.02.2013 for the clearance of imported goods declared as “Knitted Fabrics” under Customs Tariff Item (CTI) 6006 4200. The declared value was USD 2.80 per kg, amounting to a total value of USD 61,917.80 for 22,113.5 kgs of goods imported from China. However, during the assessment, the Customs Department enhanced the unit value to USD 4.60 per kg based on a DRI (Directorate of Revenue Intelligence) Alert Circular dated 09.05.2011, which indicated under-valuation of fabrics imported from China. Consequently, the appellant paid a differential duty of Rs. 5,75,345/-.

Feeling aggrieved by the enhancement of the declared value, the appellant filed an appeal before the Commissioner of Customs (Appeals), arguing that the rejection of the declared value was contrary to the provisions of Section 17(5) of the Customs Act, 1962, and Rule 12 of the Customs Valuation Rules, 2007. The Commissioner (Appeals) rejected the appeal, stating that the assessment of the Bill of Entry was not appealable and directed the appellant to approach the lower authority for a speaking order.

The appellant then approached the Tribunal, which remanded the matter to the original authority, directing it to pass a speaking order. The original authority subsequently issued an Order-in-Original dated 27.11.2014, rejecting the declared transaction value and reassessing the value at USD 4.60 per kg under Rule 4 of the Customs Valuation Rules, 2007. The appellant challenged this order before the Commissioner (Appeals), who upheld the original authority’s decision. This led to the present appeal before the Tribunal.

Key Issues in the Case

The Tribunal identified two primary issues for determination:
1. Was the enhancement of the declared value legally sustainable? 
  - The appellant argued that the enhancement was arbitrary and not based on proper evidence. They contended that the data of contemporaneous imports was not shared with them, and there was no proof that the declared value was not the “actual price paid or payable” for the imported goods.
  - The appellant also cited previous judgments, such as Sedna Impex Pvt. Ltd. vs. Commissioner of Customs, Faridabad and Surbhit Impex Pvt. Ltd. vs. Commissioner of Customs (Import), Nhava Sheva, where similar enhancements based on DRI alerts were rejected.
2. Did the reassessment comply with the legal provisions of Section 14 of the Customs Act, 1962, and the Customs Valuation Rules, 2007? 
  - The Tribunal examined whether the reassessment followed the sequential methodology prescribed under Rules 3 to 9 of the Customs Valuation Rules, 2007.
Tribunal’s Observations and Judgment 

After carefully analyzing the submissions and legal provisions, the Tribunal made the following observations:
1. Violation of Legal Provisions:
  - The Tribunal noted that the proper officer did not follow the sequential methodology prescribed under Rules 3 to 9 of the Customs Valuation Rules, 2007. Specifically, Rule 4, which deals with the transaction value of identical goods, was not applied correctly. The comparison of values at the “same commercial level” and “substantially the same quantity” was not examined, which is a mandatory requirement under Rule 4.
2. Non-Adherence to Principles of Natural Justice:
  - The Tribunal observed that the department did not issue a show-cause notice or provide the appellant with an opportunity for a personal hearing before enhancing the declared value. This was a clear violation of the principles of natural justice.
3. Lack of Evidence:
  - The department failed to provide evidence that the declared value was not the actual price paid or payable for the imported goods. The Tribunal emphasized that valuation cannot be done arbitrarily based on general alerts or assumptions.
4. Precedents:
  - The Tribunal referred to similar cases, such as Surbhit Impex Pvt. Ltd., where the enhancement of declared value based on DRI alerts was deemed unsustainable due to the lack of reasonable cause to reject the transaction value.
Final Order

The Tribunal concluded that the impugned order passed by the Commissioner of Customs (Appeals) was not legally sustainable. It set aside the order and allowed the appeal in favor of the appellant, M/s Kumar Mahendra Exim.

Key Takeaways

This case underscores the importance of adhering to the legal framework for customs valuation and reassessment. Some key lessons include:
1. Adherence to Legal Provisions:
  - Customs authorities must strictly follow the provisions of Section 14 of the Customs Act, 1962, and the Customs Valuation Rules, 2007, when reassessing the value of imported goods.
2. Principles of Natural Justice:
  - Importers must be given a fair opportunity to justify their declared value, and any enhancement must be supported by concrete evidence. Failure to issue a show-cause notice or provide a personal hearing violates the principles of natural justice.
3. Evidence-Based Valuation:
  - The rejection of declared value must be based on credible evidence, such as data on contemporaneous imports of identical goods. Arbitrary reliance on general alerts or assumptions is not permissible.
4. Precedents Matter:
  - Previous judgments play a crucial role in shaping the interpretation of legal provisions. Importers and customs authorities should consider relevant case laws to ensure compliance.
Conclusion

The judgment in the Kumar Mahendra Exim case serves as a reminder of the need for transparency, fairness, and adherence to legal procedures in customs valuation and reassessment. It highlights the importance of protecting the rights of importers while ensuring that customs authorities act within the bounds of the law. This case is a significant milestone in the evolution of customs law in India and provides valuable insights for importers, legal practitioners, and policymakers.

Source: CESTAT Mumbai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 23, 2026
CESTAT Chennai Sets Aside Penalty on Chartered Accountant
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 21.02.2026

CESTAT Chennai Sets Aside Penalty on Chartered Accountant

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.

In a significant judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside penalties imposed on Chartered Accountant under Section 112(a) of the Customs Act, 1962. This decision, delivered on February 19, 2026, highlights the importance of due diligence in professional practices while also emphasizing the need for a fair assessment of liability in cases involving alleged abetment of customs duty evasion.

Background of the Case

The case revolves around two appeals filed by appellant, a Chartered Accountant and partner at M/s. Rana & Shah Associates, Surat. The appeals were filed to challenge the Orders-in-Original No. 24497/2014 and 24494/2014, issued by the Commissioner of Customs, Chennai, on March 27, 2014, and March 26, 2014, respectively. These orders imposed penalties of ₹3,00,000 and ₹2,00,000 on Appellant under Section 112(a) of the Customs Act, 1962.

The penalties were imposed on the grounds that Appellant had issued certificates certifying the consumption of raw materials and production capacity of installed machinery for two firms—M/s. Minerva Tex Fab and M/s. N.S. Textiles, both based in Surat. These certificates were allegedly used by the firms to obtain Advance Authorizations from the Directorate General of Foreign Trade (DGFT) for duty-free import of goods. However, the imported goods were later found to have been diverted to the local market in Bangalore, violating the conditions of the Advance Authorizations and rendering the goods liable for confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962.

Appellant’s Defense

Represented by Advocate, Appellant argued that he had issued the certificates in good faith and without any knowledge of their misuse. He contended that the certificates were issued free of charge at the request of his friend, Advocate, who claimed they were required for bank loan purposes. Appellant further stated that he had verified the documentary evidence provided to him, including PAN numbers, Small Scale Industries (SSI) registration, rental agreements, and books of accounts, before issuing the certificates. He emphasized that Chartered Accountants are not required to physically verify premises or machinery for issuing such certificates.

The appellant also pointed out that the Advance Authorizations were issued by the DGFT three months before he issued the certificates, making it impossible for the certificates to have been used to obtain the licenses. He argued that the responsibility for verifying the genuineness of the documents submitted for Advance Authorizations lay with the issuing officer at the DGFT, not with him.

Revenue’s Argument

The Revenue, represented by Authorized Representative, argued that Appellant had issued certificates without verifying the existence of the units or machinery. The certificates were later used by M/s. Minerva Tex Fab and M/s. N.S. Textiles to obtain Advance Authorizations for importing goods under the actual user condition, which were subsequently diverted to the local market. The Revenue contended that Appellant’s actions facilitated the fraudulent activities of the two firms, making him liable for penalties under Section 112(a) of the Customs Act, 1962.

Tribunal’s Observations and Judgment 

After hearing both sides and reviewing the evidence, the Tribunal concluded that the penalties imposed on Appellant were not justified. The key points of the judgment are as follows:
1. No Evidence of Collusion or Abetment: The Tribunal found no evidence to suggest that Appellant had colluded with M/s. Minerva Tex Fab or M/s. N.S. Textiles to facilitate their fraudulent activities. The certificates were issued based on documentary evidence provided to him, and there was no indication that he knowingly aided or abetted the illegal importation and diversion of goods.
2. Timing of Certificates: The Tribunal noted that the Advance Authorizations were issued by the DGFT three months before Appellant issued the certificates. This timeline clearly demonstrated that the certificates were not used to obtain the licenses.
3. Professional Negligence: While the Tribunal acknowledged that Appellant had acted negligently in issuing the certificates without adequate verification, it emphasized that negligence alone does not attract penalties under Section 112(a) of the Customs Act, 1962. The section requires evidence of abetment or direct involvement in the illegal activities, which was absent in this case.
4. Precedents: The Tribunal referred to the judgment of the Hon’ble Bombay High Court in Mahesh P. Patel vs. The Commissioner of Customs (EP) [2018 (12) TMI 883 – Bombay High Court], which held that mere issuance of certificates without due diligence does not constitute abetment under Section 112(a) of the Customs Act, 1962.
5. Leniency and Future Conduct: While setting aside the penalties, the Tribunal advised Appellant to exercise greater caution in issuing certificates in the future to avoid similar situations.
Conclusion

The CESTAT’s decision to exonerate Appellant underscores the importance of distinguishing between professional negligence and active abetment in cases involving customs duty evasion. While the Tribunal acknowledged the appellant’s lack of due diligence, it ruled that the requirements of Section 112(a) of the Customs Act, 1962 were not met, as there was no evidence of collusion or direct involvement in the illegal activities.

Source: CESTAT Chennai

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 21, 2026
CESTAT Delhi- Thermal Printers Classified as Medical Equipment Under CTI 9018
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 21.02.2026

CESTAT Delhi- Thermal Printers Classified as Medical Equipment Under CTI 9018

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.

In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, delivered a judgment on February 20, 2026, addressing the classification of thermal printers imported by M/s AGFA Healthcare India Pvt. Ltd. The case revolved around whether these printers should be classified under Customs Tariff Item (CTI) 9018 90 99, as medical diagnostic equipment, or under CTI 8443 32 90, as general printing machinery.

Background of the Case

M/s AGFA Healthcare India Pvt. Ltd., a company engaged in trading and distributing medical equipment, imported various models of thermal printers, including Drystar 5301, Drystar 5302, Drystar 5503, and Drystar Axys, between July 1, 2017, and March 31, 2019. These printers were used to produce high-quality medical films for diagnostic purposes in hospitals, medical laboratories, and colleges. The company classified these printers under CTI 9018 90 99, which covers instruments and appliances used in medical sciences, and availed exemptions under Notification No. 50/2017-Customs.

However, the Directorate of Revenue Intelligence (DRI) initiated investigations and argued that the printers should be classified under CTI 8443 32 90, which pertains to general printing machinery. The DRI contended that the printers did not perform diagnostic functions and were capable of connecting to Automatic Data Processing (ADP) machines or networks, making them general-purpose printers. Consequently, the DRI issued a show-cause notice proposing reclassification and demanded differential duty, interest, and penalties under various sections of the Customs Act, 1962.

Key Issues in the Case

The primary issue before the Tribunal was the classification of the imported thermal printers. The department argued that the printers were general-purpose printing machinery, while the appellant contended that they were specifically designed for medical diagnostic purposes and should be classified under CTI 9018 90 99.

Arguments Presented

Appellant’s Arguments:
1. Burden of Proof: The appellant argued that the burden of proving reclassification lies with the department, which failed to provide sufficient evidence.
2. Medical Use: The thermal printers were specifically designed for medical sciences, capable of producing diagnostic-quality images on heat-sensitive medical films. These printers were integral to the diagnostic process.
3. Technical Evidence: The appellant presented technical literature, product brochures, and expert declarations from medical professionals and engineers to substantiate their claim that the printers were medical diagnostic equipment.
4. Legal Precedents: The appellant cited previous judgments where goods specifically designed for medical use were classified under Chapter 90, even if they shared general characteristics with items in other chapters.
Department’s Arguments:
1. General Printing Machinery: The department argued that the printers were not exclusively used for medical diagnostics and could connect to ADP machines or networks, making them general-purpose printers.
2. Extended Limitation Period: The department justified invoking the extended period of limitation under Section 28(4) of the Customs Act, citing misdeclaration and suppression of facts by the appellant.
3. Penalties and Interest: The department defended the imposition of penalties and interest, asserting that the appellant intentionally misclassified the goods to evade higher customs duties.
Tribunal’s Observations and Decision 

After considering the arguments and evidence, the Tribunal ruled in favor of M/s AGFA Healthcare India Pvt. Ltd. The key observations and conclusions were:
1. Classification Under CTI 9018: The Tribunal held that the thermal printers imported by the appellant were specifically designed for medical diagnostic purposes. They were capable of producing diagnostic-quality images on medical films, which are essential for accurate diagnosis in radiology. The printers were deemed medical equipment and classified under CTI 9018 90 99.
2. Burden of Proof: The Tribunal emphasized that the burden of proving reclassification lies with the department. In this case, the department failed to provide evidence that the printers were not used for medical diagnostics, while the appellant presented substantial technical and expert evidence supporting their claim.
3. Legal Precedents: The Tribunal referred to previous judgments, including Westfort Hi-Tech Hospital Ltd. vs. Commissioner of Customs, Cochin and Prosoya Industries Ltd. vs. Collector of Customs, New Delhi, which established that goods specifically designed for medical use should be classified under Chapter 90.
4. Extended Limitation Period: The Tribunal found that the department’s invocation of the extended period of limitation under Section 28(4) of the Customs Act was not justified, as the appellant had not engaged in suppression of facts or misdeclaration.
5. Penalties and Interest: Since the demand for differential duty was set aside, the penalties and interest imposed on the appellant and its manager, were also quashed.
Implications of the Judgment 

This landmark decision has significant implications for the classification of goods under the Customs Tariff Act. It reinforces the principle that goods specifically designed for medical use should be classified under Chapter 90, even if they share general characteristics with items in other chapters. The ruling also underscores the importance of technical evidence and expert opinions in determining the classification of goods.

For businesses importing medical equipment, this judgment serves as a reminder to maintain detailed documentation and technical specifications to substantiate their claims during customs assessments. It also highlights the need for the department to provide concrete evidence when challenging the classification of goods.

Conclusion

The CESTAT’s decision in favor of M/s AGFA Healthcare India Pvt. Ltd. is a victory for businesses importing specialized medical equipment. It sets a precedent for the classification of goods under the Customs Tariff Act and provides clarity on the importance of technical evidence in such cases. This ruling is a testament to the importance of a fair and thorough examination of facts and evidence in resolving disputes related to customs classification.

Listen to this on our #YouTube Channel

Source: CESTAT Delhi

Disclaimer

Handy Download:

“Handy Order for Download”Download

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com
February 21, 2026