TaxTMI 
TaxTMI 
2026 (8) TMI 434
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....gainst the appellant-company; the imported goods were held liable to confiscation under Section 111(m) of the Customs Act, 1962. 1.1. The subject appeal had earlier been allowed by this Tribunal following the judgment of the Hon'ble Supreme Court in Canon India Pvt. Ltd. v. Commissioner of Customs reported in AIR 2021 SC 1699 on the question of jurisdiction of the Directorate of Revenue Intelligence to issue the Show Cause Notice. However, pursuant to the subsequent review judgment of the Hon'ble Supreme Court in Commissioner of Customs v. Canon India Pvt. Ltd. reported in [2024] 12 S.C.R. 202, an Order of remand has been passed in Union of India & Ors. v. Aspam Petrochem Pvt. Ltd. & connected matters in Civil Appeal No. 6142 of 2019 & ors. Thus, the matter stands remanded to this Tribunal for consideration of the issue on merits. The present proceedings, therefore, are confined to examination of the merits of the demand and the findings recorded in the impugned Order-in-Original. 2. Briefly stated, the appellant, M/s. Beriwala Impex Private Limited, holder of Importer-Exporter Code No. 0599014156, is a private limited company engaged, inter alia, in the import of LDP....
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....t USD 200-300 per metric tonne and that the differential consideration had been remitted through hawala channels. The seized electronic devices were thereafter forwarded to the Government Examiner of Questioned Documents (GEQD), Hyderabad for forensic examination and imaging, from which various electronic records, supplier price lists and transaction details were allegedly recovered. The Department further relied upon contemporaneous import prices of similar goods imported by M/s. Radha Enterprises and M/s. Shami Impex for alleging undervaluation of the appellant's imports. 4.1. Shri Praveen Goel, one of the Directors of the appellant-company, deposited Rs. 50,00,000/- (initially by cheque dated 17.07.2009 and thereafter by six demand drafts dated 22.07.2009 of ICICI Bank in favour of the Commissioner of Customs (Import), Chennai) towards partial discharge of the alleged duty liability, which, as per the appellant, was done under compulsion and the threat of arrest. 4.2. The appellant also disputed the voluntariness and correctness of the aforesaid statements, claiming that the same were obtained under duress and coercion and were written at the behest of the officers of ....
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....ods under Section 111(m) of the Customs Act, 1962, besides inter alia imposing penalty equal to the above differential duty demand upon the appellant-company under Section 114A of the Act. 5.3. Aggrieved thereby, the appellant has preferred the present appeal before this Tribunal. 6. During the course of hearing, the Ld. Counsel appearing on behalf of the appellant filed advanced various submissions, both oral and written, in support of her contentions, which are summarized as under: - A. The declared values having been examined, loaded and assessed by the proper officer at the time of clearance, and duty having been paid on such enhanced value, the assessments attained finality and could not be reopened by way of a Show Cause Notice demanding further differential duty without the assessments first being reviewed under Section 129D(2) or set aside in appeal under Section 128 of the Customs Act, 1962. (i) Admittedly, in respect of the 61 Bills of Entry filed at Kolkata, the 28 Bills of Entry filed at Chennai and the 3 Bills of Entry filed at ICD, Tughlakabad, the declared values were scrutinised by the proper officer and, wherever considered necessary, the as....
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.... (ii) It is a settled position of law that the extended period of limitation can be invoked only where the Revenue establishes collusion, or any wilful mis-statement, or suppression of facts on the part of the importer with intent to evade payment of duty. Mere alleged under-valuation, without more, does not amount to suppression so as to attract the extended period. (iii) In the present case, the goods were imported under proper Bills of Entry accompanied by the commercial invoices, and the declared values were scrutinised by the proper officer and, wherever considered necessary, enhanced/loaded on the basis of contemporaneous import data, whereafter the goods were assessed and cleared on payment of duty. The entire import transaction and the valuation of the imported goods were thus squarely within the knowledge of the Department at the time of assessment itself. There being full disclosure and departmental knowledge, no suppression or wilful misstatement with intent to evade duty can be attributed to the Appellant, and the extended period could not have been invoked. (iv) In this context, reliance is placed on the ruling in the case of M/s Sterling Meta-P....
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....ous imports at a higher price, and that under-valuation must be proved by tangible evidence and not by uncorroborated statements. In this context, reliance is placed on the following judgments: * Commissioner of Customs (Imports), Mumbai vs. Ganpati Overseas reported in (2023) 11 Centax 101 (S.C.) / 2023 (386) E.L.T. 802 (S.C.) * Commissioner Customs (EP), Mumbai vs. Yatin Steels India Pvt. Ltd. reported in 2019 (1) TMI 1050 - CESTAT Mumbai; * M/s. Swastik Stockists and Traders Pvt. Ltd. & Anr. vs. Commissioner of Customs (Port), Kolkata reported in 2025 (8) TMI 1235 - CESTAT Kolkata; * M/s Temple City Developers Pvt. Ltd. & Ors. vs. Commissioner of Customs, Visakhapatnam reported in 2026 (4) TMI 541 - CESTAT Hyderabad; * M/s Uttam Steel Alloys Pvt. Ltd. & Ors. vs. Commissioner of Customs, Noida reported in 2026 (5) TMI 879 - CESTAT Allahabad; * M/s. Mukesh Kumar & Ors. vs. Commissioner of Customs, Chennai reported in 2026 (2) TMI 916 - CESTAT Chennai; (v) Relying upon the principles laid down in the aforesaid judgments, and there being neither reliable contemporaneous comparables nor any proof of extra consideration on....
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....08, having been obtained under duress and coercion and disputed by the Appellant, have no evidentiary value; even otherwise, they could not be relied upon without corroboration and without compliance with the mandatory procedure prescribed under Section 138B of the Customs Act, 1962 is a gross violation of the principles of natural justice. (i) Section 138B of the Customs Act, 1962 makes a statement recorded during inquiry relevant in adjudication only after the maker is examined as a witness before the adjudicating authority, the authority forms an opinion that the statement ought to be admitted in the interest of justice. (ii) In the present case, the statements were extracted under coercion and duress, their voluntariness has been disputed throughout, and the makers were not examined-in-chief as required under Section 138B of the Customs Act, 1962. (iii) It is further settled that a statement recorded under duress or coercion cannot be used against its maker, and that an inculpatory statement of a co-noticee cannot, by itself, fasten liability unless it is supported by independent and reasonably verifiable corroboration. Here, the entire re-determinati....
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.... (iv) It is a settled position that mere seizure, panchnama or a subsequent forensic report is no substitute for the mandatory certification under Section 138C. In this context, reliance is placed on the following judgments: * Ajanta Overseas vs. Principal Commissioner of Customs (Import), New Delhi reported in 2026 (2) TMI 444 - CESTAT New Delhi * Ghanshyam Kamra & Ors. vs. Principal Commissioner of Customs (Import), New Delhi reported in 2026 (1) TMI 1295 - CESTAT New Delhi * M/s Baba Leather Impex Pvt. Ltd. & Ors. vs. Commissioner of Central Excise (Adj.), New Delhi reported in 2026 (5) TMI 780 - CESTAT New Delhi * M/s Uttam Steel Alloys Pvt. Ltd. & Ors. vs. Commissioner of Customs, Noida reported in 2026 (5) TMI 879 - CESTAT Allahabad * M/s. Mukesh Kumar & Ors. vs. Commissioner of Customs, Chennai reported in 2026 (2) TMI 916 - CESTAT Chennai * P.C. Jain & Ors. vs. Commissioner of Customs (Port), Kolkata reported in 2025 (5) TMI 1626 - CESTAT Kolkata / (2026) 38 Centax 211 (Tri. - Cal.) (v) Relying upon the aforesaid judgments, the Appellant submits that the imaged data and printouts relied upon in the Impugned Ord....
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....en Goel, recorded under Section 108 of the Customs Act, 1962, which as per him constitute clear and voluntary admissions establishing the deliberate undervaluation of the imported goods and the consequent evasion of customs duty. It was further contended that the electronic records and imaged data retrieved during investigation duly corroborate the said admissions and demonstrate the actual value of the imported consignments. Thus, according to the Revenue, the material brought on record unequivocally establishes suppression and wilful misdeclaration on the part of the appellant with intent to evade payment of customs duty, thereby fully justifying invocation of the extended period of limitation. The Ld. Authorized Representative of the Revenue, therefore, prayed for dismissal of the appeal and for upholding the impugned order. 8. Heard both sides and perused the records placed before us. 9. At the outset, we note that the consignments forming the subject matter of the present proceedings were not mechanically cleared on the basis of the values declared by the appellant. The records reveal that, at the time of import itself, the proper officers had scrutinized each of the Bil....
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....ittance record, banking trail or other independent evidence has been brought on record to establish any payment made by the appellant over and above the invoice value declared before Customs. The allegation that differential consideration was remitted through hawala channels remains, therefore, a bare assertion unsupported by any objective or corroborative material. Such a serious allegation, carrying substantial civil consequences, cannot be sustained merely on the basis of assumptions in the absence of any demonstrable money trail or other convincing evidence establishing flow-back of consideration. 11.1.1. The same view has been expressed by the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai v. Ganpati Overseas [(2023) 11 Centax 101 (S.C.) / 2023 (386) E.L.T. 802 (S.C.)], wherein it has been observed as under: - "39.1 This Court held that before rejecting the invoice price, the department has to give cogent reasons for such rejection. This is because the invoice price forms the basis of the transaction value. In this regard, this Court held that under valuation has to be proved. If the department wants to allege under valuation, it....
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....s of like goods." 39.2 Reverting to Section 14(1) of the Customs Act, this Court held that it is for the department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. This is what this Court has said : "13. Section 14(1) speaks of "deemed value". Therefore, invoice price can be disputed. However, it is for the Department to prove that the invoice price is incorrect. When there is no evidence of contemporaneous imports at a higher price, the invoice price is liable to be accepted. The value in the export declaration may be relied upon for ascertainment of the assessable value under the Customs Valuation Rules and not for determining the price at which goods are ordinarily sold at the time and place of importation. This is where the conceptual difference between value and price comes into discussion." 40. Section 14 of the Customs Act and Rules 3 and 4 of the Customs Valuation Rules again came up for consideration before this Court in Varsha Plastics Private Limited [2009 (235) E.L.T. 193 (S.C.) = [2009] taxmann.com 323 (SC). As regards Section 14(....
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....s also held by this Court in Eicher Tractors [(2001) 1 SCC 315] that both Section 14(1) of the Act and Rule 4 provide that the price paid by the importer to the vendor in the ordinary course of commerce shall be deemed to be the value in the absence of any of the special circumstances indicated in Section 14(1) and particularised in Rule 4(2). However, when the transaction value under Rule 4 is rejected, the value shall be determined by proceeding sequentially through Rules 5 to 8 of the Rules." 40.2 This Court also referred to the decisions in Rabindra Chandra Paul (supra) and South India Television (P.) Ltd. (supra) to reiterate the recognised legal position that transaction value can be rejected if the invoice price is not found to be correct but it is for the department to prove that the invoice price is incorrect." 11.2. Equally, we find that the re-determination of value undertaken in the impugned order substantially rests upon the import values declared by unrelated entities, namely, M/s. Radha Enterprises and M/s. Shami Impex. However, neither the Show Cause Notice nor the impugned Order undertakes any meaningful exercise to establish the comparability of such i....
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....so placed substantial reliance upon the statements recorded under Section 108 of the Customs Act, 1962. While such statements undoubtedly lend support to the Department's case, they cannot, in the peculiar facts of the present matter, be regarded to be conclusive by themselves. It is a fact that the appellant has consistently disputed the voluntariness of the said statements by asserting that the same were obtained under threat, duress and coercion. More importantly, the mandatory safeguards engrafted under Section 138B of the Customs Act, 1962 governing the evidentiary use of such statements during adjudication have also not been shown to have been complied with. In these circumstances, the statements, though relevant, cannot by themselves furnish an unimpeachable foundation for sustaining the serious allegation of systematic undervaluation. 11.4. Likewise, the electronic records, computer printouts and imaged data retrieved during investigation also do not substantially advance the Revenue's case. Admittedly, the electronic material relied upon is not accompanied by the certificate contemplated under Section 138C(4) of the Customs Act, 1962, nor has it been demonstrate....
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....hold and enhanced wherever considered necessary, it becomes difficult to readily infer, without cogent and convincing evidence, that the appellant had succeeded in suppressing material particulars or practising fraud upon the Department. The burden to establish such serious allegations squarely rested upon the Revenue, and the existence of finalized assessments after due scrutiny substantially dilutes the foundation on which the extended period of limitation has been invoked. 13.1. We find that the Revenue has sought to invoke the extended period provisions for imports pertaining to the period from 2007 to 2009, whereas the impugned Show Cause Notice came to be issued only on 03.04.2012, which is well beyond the normal period of limitation prescribed under the Customs Act, 1962. It is well settled that the burden to establish the existence of collusion, wilful mis-statement or suppression of facts with intent to evade payment of duty squarely rests upon the Revenue, and the extended period cannot be invoked merely on the basis of allegations of undervaluation unsupported by cogent and convincing evidence. 13.2. In the instant case, as already observed hereinbefore, the fact t....
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.... under Section 108, which by themselves do not conclusively establish the allegations in the absence of adequate corroboration, no evidence of any extra consideration, money trail or alleged hawala remittance has been brought on record. Likewise, the electronic materials relied upon during investigation also suffer from the statutory infirmities already discussed hereinabove. Even the re-determination of value proceeds substantially on the basis of imports made by unrelated entities, without establishing the mandatory parameters of comparability contemplated under the Customs Valuation Rules. In view thereof, the aforesaid circumstances also unmistakably point to the absence of any element of fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of duty, which constitute the essential statutory ingredients for invocation of the extended period of limitation under the Customs Act, 1962." 13.5. Having regard to the cumulative effect of the foregoing discussion, particularly the fact that the imported consignments had already undergone scrutiny and assessment by the proper officers of the Revenue, the absence of cogent and corroborative evidence....
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....propriating the said seized amount towards any non-existent customs liability does not arise. It is also well settled that currency seized during investigation cannot be retained indefinitely in the absence of legally admissible evidence establishing its connection with the alleged offence. A similar view has been taken by this Tribunal in Rajendra Roy & anr. v. Commissioner of Cus. (Prev.), Kolkata [Final Order Nos. 75615-75616 of 2026 dated 20.05.2026 in Customs Appeal Nos. 75021 & 75022 of 2022 - CESTAT, Kolkata], wherein it was observed that, in the absence of any investigation establishing the source of the seized currency or its nexus with the alleged offence, the Department is not justified in retaining the same. The relevant portion of the said order is reproduced below as ready reference: - "14.2. It is a settled position of law that statements recorded during investigation, in the absence of corroborative evidence, cannot ipso facto form the sole basis for sustaining a serious charge such as confiscation of currency on the ground of it being sale proceeds of smuggled goods. The allegation of the Revenue requires to be supported by cogent material indicating a cle....