Case Details: Saravanan Palaniappan v. Commissioner of Customs, Tuticorin (2025) 32 Centax 48 (Tri.-Mad)
Judiciary and Counsel Details
- S/Shri P. Dinesha, Member (J) & M. Ajit Kumar, Member (T)
- S/Shri A. Ashwini Kumar, Hari Radhakrishnan, Advs., for the Appellant.
- S/Shri Anoop Singh & Harendra Singh Pal, Authorised Representatives, for the Respondent.
Facts of the Case
The appellant imported black pepper from a related entity in Sri Lanka. The imports were alleged to be overvalued to circumvent the Minimum Import Price (MIP) condition set by DGFT Notification No. 21/2015-20, which prohibits import of black pepper if the CIF value is below ₹500 per kg. The Customs Commissioner rejected the declared transaction value, re-determined a higher value, treated the goods as ‘prohibited,’ and imposed heavy penalties under Sections 112 and 114AA of the Customs Act, 1962. The importers appealed against this order before the CESTAT.
The appellants argued that the prohibition on black pepper imports was conditional, not absolute, and that their declared value was above the MIP. They contended that the relationship between importer and exporter alone was not a valid ground to reject the transaction value, especially since all duties and taxes were promptly paid, causing no loss to the revenue. They also argued that the Customs authorities had not established any misdeclaration or contravention of law, and that penalties were unwarranted.
The Department maintained that the imports were overvalued to circumvent the MIP and that the relationship justified rejection of the declared value and imposition of penalties.
CESTAT Held
The CESTAT, Chennai, noted that the prohibition on import was conditional (dependent on the MIP) and not absolute. Since the declared value was above the MIP and all duties were paid, there was no loss to the revenue or violation of law. The Tribunal held that mere relationship between parties is not sufficient to reject the transaction value, especially in the absence of evidence of under-valuation or misdeclaration. The declared assessable value did not warrant interference or redetermination, and thus, confiscation and penalties under Sections 112 and 114AA were not justified. The appeals were allowed, and the penalties and redetermination of value were set aside.
List of Cases Cited
- Amrit Foods v. Commissioner — 2005 (190) E.L.T. 433 (S.C.) — Referred [Para 8.5]
- Indu Nissan Oxo Chemical Industries v. Commissioner — 2013 (290) E.L.T. 299 (Tribunal) — Referred [Para 8.4]
- ITC Limited v. Commissioner — 2019 (368) E.L.T. 216 (S.C.) — Referred [Para 5]
List of Notifications Cited
- DGFT Notification No. 21/2015-20, dated 25-7-2018 [Paras 3, 13]
