CESTAT Quashes Rs. 95 Lakh Customs Duty Demand over Improper Valuation of Imported Cranes
The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has quashed a customs order demanding over Rs. 95 lakh in differential duty and penalties on the import of 16 used cranes, citing serious lapses in valuation procedure and violation of principles of natural justice.
The bench of Ajay Sharma (Judicial Member) and C.J. Mathew (Technical Member) has observed that the customs authorities had reassessed the value of the cranes solely based on uncorroborated statements recorded during investigation, without complying with the Customs Valuation Rules or allowing cross-examination of key witnesses — a requirement under Section 138B of the Customs Act, 1962.
The case arose from imports made between July 2007 and January 2008 by RP Cranes & Hiring Co, which had already deposited Rs. 20 lakh during the investigation. The adjudicating authority had not only confirmed a revised valuation of Rs. 2.09 crore but also diverted Rs. 16.44 lakh from the deposit towards another unadjudicated show cause notice — a move the Tribunal called “a gross error.”
The Tribunal referred to earlier decisions, including Karim Jaria and Crown Lifters Pvt Ltd v. Commissioner of Customs and Parle Beverages Pvt Ltd v. CCE, underscoring that reassessment of value must be based on sound, legally admissible evidence.
“The reliance on statements alone is too fragile a foundation to build a case of undervaluation,” the CESTAT observed.
Setting aside the impugned order, the Tribunal remanded the matter for fresh adjudication, directing the customs authority to re-determine the value strictly in accordance with the Customs Valuation (Determination of Value of Imported Goods) Rules as applicable.
Case Details
Case Title: RP Cranes & Hiring Co versus Commissioner of Customs (Import)
Case No.: CUSTOMS APPEAL NO: 89891 OF 2014
Date: 13/05/2025
Counsel For Appellant: Dr. Sujay Kantawala
Counsel For Respondent: Ram Kumar
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
