ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 06.10.2025
CESTAT Mumbai Sets Aside RSP Re-determination in Ceramic Tiles
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), Mumbai, has set aside the recovery of differential duty and penalties imposed on M/s Padma Ceramics Pvt Ltd, M/s RAS International, and their director, in connection with the import of ceramic tiles. The case, which revolved around the alleged under-reporting of the retail selling price (RSP) of imported goods, highlights critical aspects of customs law and the limits of authority vested in customs officers.
Background of the Case
The proceedings stemmed from the import of ceramic tiles between June 2003 and September 2005. The Commissioner of Customs (General), Mumbai, had passed orders imposing duty liabilities of ₹44,66,124 on M/s Padma Ceramics Pvt Ltd and ₹98,48,522 on M/s RAS International under Section 28 of the Customs Act, 1962. Additionally, penalties of ₹10,00,000 and ₹20,00,000 were imposed on Appellant under Section 112 of the Customs Act, 1962. The goods were also held liable for confiscation under Section 111(m) of the Customs Act, 1962.
The crux of the case was the allegation that the appellants had under-reported the RSP of the imported tiles, which formed the basis for calculating the additional duty of customs under Section 3(1) of the Customs Tariff Act, 1975. The customs authorities argued that subsequent evidence revealed higher prices at which the tiles were sold to consumers, justifying the recovery of differential duty.
Source: CESTAT Mumbai
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