The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that in the case of mis-declaration of ‘used cranes’ imports held that payment made during the probe cannot be appropriated towards alleged duty shortfall beyond 5 years.
The bench of Ajay Sharma (Judicial Member) and C J Mathew, (Technical Member) has observed that the value had been similarly determined solely on the basis of statements recorded during the course of investigation, it would be appropriate to set aside the order similarly and remand the matter back to the original authority to determine the value afresh in terms of Customs Valuation (Determination of Value of Imported Goods) Rules, 1988/2007, as applicable.
The appeals arise from a common order of Commissioner of Customs (Import), Mumbai and is one of the several series of imports that were taken up for investigation for mis-declaration of value of ‘used cranes’ in which, purportedly and in tune with ‘standard operating procedure’ for assessment, the declarations of value were computed from the weight thereof and standard unit rate.
It is in circumstances of similar dispute that the imports effected by M/s GS Sethi & Sons and M/s Auto World against nine bill of entry filed by former between April 2006 and July 2010 and by the latter on 10th September 2007 were subjected to proceedings stemming from show cause notice issued to the importer and to the several individual appellants.
The investigation, relying upon value provided by independent chartered engineer, proposed rejection of declared value of Rs. 2,10,72,548 and of Rs. 11,55,161 for re-determination thereof for proposing re-determination as Rs. 4,63,15,577 and Rs. 18,55,200 to recover short-paid duty of Rs. 79,67,035 and Rs. 2,22,846 from M/S GS Sethi & Sons and M/s Auto World respectively.
The recourse to relevant Rules notified under section 14 of Customs Act, 1962 for rejection of declared value and consequent re-determination in terms of rule 8 under the erstwhile Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 respectively for confirming duty liability under section 28 of Customs Act, 1962, along with appropriate interest under section 28AA of Customs Act, 1962, besides imposition of penalties is assailed in these appeals.
Dr. Sujay Kantawala, the counsel for the appellant contended that the show cause notice issued had wrongly invoked the recovery provision in relation to imports effected by M/s Auto World and barring imports against bill of entry and bill of entry of M/s GS Sethi & Sons as these had been effected well before the ‘five year’ limitation permitted. It was also contended that though the re-valuation was based upon the certificate of chartered engineer their plea for cross-examination of the certifying authority was rejected peremptorily.
The tribunal held that order had appropriated the amount paid during investigation towards alleged dues arising from short-payment of duty on imports effected prior to the period permitted by section 28 of Customs Act, 1962. Clearly, that is not a liability in the absence of empowerment to contemplate recovery. There is no voluntary acceptance of duty liability and willing readiness to accept that obligation either.
Case Details
Case Title: Auto World Versus Commissioner of Customs (Import)
Case No.: Customs Appeal No: 85468 Of 2014
Date: 12/09/2025
Counsel For Appellant: Dr. Sujay Kantawala, Aishwarya Kantawala and Jeffrey Cales, Advocates
Counsel For Respondent: AK Srivastava, Assistant Commissioner (AR)
