Transaction Value Cannot Be Rejected on Unreliable Evidence | CESTAT

Case Details: Surya Prakash Bhandari vs. Commissioner of Customs (Import), Chennai-II (2026) 38 Centax 341 (Tri.-Mad)

Judiciary and Counsel Details

• • S/Shri Ajayan T.V., Member (J) & M. Ajit Kumar, Member (T)
  • Shri S. Venkatachalam, Adv., for the Appellant.
  • Shri Anoop Singh, Authorised Representative, for the Respondent.

Facts of the Case

Based on intelligence regarding undervaluation of imported self-adhesive tapes and related goods, the DRI conducted investigations covering imports made through Chennai and Cochin ports during January 2003 to June 2007. During searches, various documents, including insurance documents, shipping advices, proforma invoices, handwritten slips, and fax messages, were recovered. Relying on these documents and statements recorded during the investigation, the department alleged undervaluation of imported goods, rejected the declared transaction value, demanded differential customs duty along with interest and imposed penalties. The aggrieved parties challenged the adjudication orders before the Tribunal, while the Revenue filed an appeal seeking the imposition of a penalty under section 114A of the Customs Act.

CESTAT Held

The Tribunal held that the declared transaction value could not be rejected solely on the basis of proforma invoices, insurance documents, unsigned fax messages and unauthenticated handwritten slips, as such documents did not constitute reliable evidence of the actual transaction value. It further held that the retracted statements relied upon by the department were inadmissible in the absence of compliance with section 138B of the Customs Act and denial of cross-examination. The Tribunal also observed that contemporaneous import data produced by the appellants to support the declared value had been ignored by the adjudicating authority. Since undervaluation was not established through credible evidence or comparable imports, the rejection of the transaction value and the consequent duty demands were unsustainable. It was further held that no valid demand could be raised against a holder of a power of attorney without complying with section 147(3), read with section 28, of the Customs Act. Accordingly, the impugned orders were set aside, the appeals were allowed, and the Revenue’s appeal was dismissed.

List of Cases Cited

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  • Selection Enterprises v. Commissioner — 2005 (183) E.L.T. 273 (Tri.-Bang) — Referred [Para 8]
  • Sheraton Overseas v. Commissioner — 2002 (144) E.L.T. 432 (Tri.-Mad) — Referred [Para 8]
  • Shimnit Machine Tools and Equipment Ltd. v. Commissioner — 2006 (204) E.L.T. 630 (Tri.-Bom) — Referred [Para 8]
  • Shree Sagarmatha Distributors (P) Ltd. v. Commissioner — 2005 (186) E.L.T. 307 (Tri.-Bang) — Referred [Para 8]
  • Shree Vijayalakshmi Charitable Trust v. Commissioner — (2025) 33 Centax 86 (Tri. – Chennai) — Followed [Para 40]
  • Sounds N. Images v. Collector — 2000 117 E.L.T. 538 (SC) (S.C.) — Relied on [Paras 8, 26]
  • Suni Aidasani @ Vicky v. Principal Commissioner — (2024) 18 Centax 321 (Del) — Relied on [Para 22]
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  • Thilagarathinam Match Works v. Commissioner — 2013 (295) E.L.T. 195 (Mad.) — Referred [Para 8]
  • Truwoods Pvt. Ltd. v. Commissioner — 2005 (186) E.L.T. 135 (Tri.-Del) — Referred [Para 8]
  • V.K. Impex v. Commissioner — 2002 (141) E.L.T. 564 (Tri.-Cal). — Referred [Para 8]
  • V.K. Vora v. Commissioner — 2002 (147) E.L.T. 924 (Tri.-Mad) — Referred [Para 8]
  • Vintel Distributors Pvt. Ltd. v. Commissioner — 2002 (149) E.L.T. 145 (Tri.-Mad) — Referred [Para 8]