Supreme Court Dismisses Customs Appeal; Says Importer Held Valid Licence on Date of Adjudication

The Supreme Court has dismissed a customs appeal filed by the Commissioner of Customs, Airport Special Cargo, while observing that the importer in question held a valid licence on the date of adjudication. A bench of Justice Manoj Misra and Justice Ujjal Bhuyan condoned the delay in filing but refused to interfere with the tribunal’s decision. The Court noted that the factual background clearly established that the importer possessed a valid licence when the adjudication took place. “Having regard to the facts of the case as also the reasons assigned in the impugned order, we do find a good reason to entertain this appeal, particularly when it is found that on the date of the adjudication, the importer held a valid license. However, the appeal is dismissed,” the Court said in its signed order. Importantly, the bench left unresolved a broader legal question that often arises in customs matters can customs authorities confiscate goods after they have already left the port? The Court made it clear that this issue remains open for consideration in an appropriate case, meaning the question continues to hold significance for future disputes concerning territorial jurisdiction, control, and timing of customs action. The civil appeal, arising from multiple orders passed on April 8, 2025 by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Mumbai, challenged the tribunal’s relief granted to Epsilon Eye Care Pvt. Ltd.. The customs department had sought to overturn the CESTAT finding, arguing that the goods in question were liable for confiscation. Background The case concerns multiple cross-appeals between Epsilon Eye Care Pvt. Ltd., its Director (Shyam Anand) and the Commissioner of Customs, APSC, Mumbai, arising from allegations of undervaluation and misclassification of imported intra-ocular lenses received through postal consignments. The matter is now before CESTAT, Mumbai. The dispute began in September 2022 when two live consignments were seized at the Postal Department, followed by searches at the company’s Mumbai office and Valsad factories. Except for some expired lenses at one unit, no incriminating material was found. During investigation, the company was compelled to deposit Rs. 1 crore as differential duty "to show bona fides." Several documents and statements were taken, and the company submitted all requested financial and transactional details. A Show Cause Notice (SCN) dated 17.03.2023 was issued for the period 17.05.2018 to 15.08.2022, alleging undervaluation and proposing duty demand. The company filed multiple detailed replies, asserting that the correct classification for intra-ocular lenses is CTH 9021 9090, not CTH 9804, and that declared values were genuine, supported by certified bank remittances of Rs. 51,46,343 for 49 past postal imports. The company emphasized that there was no misdeclaration in quantity, value, or description. The adjudicating authority (AA) conducted personal hearings but, according to the appellants, completely ignored their critical written submission dated 06.12.2023, despite it being submitted on the AA’s direction. The Order-in-Original dated 28.12.2023 confirmed the SCN demand without addressing classification arguments, valuation rules, or evidence submitted by the importer. This, they argue, amounts to a violation of natural justice. Epsilon contends that the Department illegally adopted a single highest value (USD 65) from a 2020 Bill of Entry—filed under 9021 9090—and applied it across all 49 postal consignments despite differences in models and quantities. They argue that this violates Rule 5 of the Customs Valuation Rules, 2007, and ignores that comparable import data was never produced by the Department. They also argue that once the Department refuses to treat the imports as personal baggage under 9804 due to commercial quantity, it cannot simultaneously classify under 9804 while using values from past imports classified under 9021. The importer highlights that the Departmental Appeal attempts to travel beyond the SCN, seeking enhancement of duty not demanded earlier, which is legally impermissible. They rely on Supreme Court judgments holding that orders cannot go beyond the SCN and that internet-listed prices cannot determine valuation. They further contend that the Tribunal has no power under Section 129B to amend the SCN or raise new grounds at the appellate stage. The appellants also point out procedural violations, including the Department filing a single common appeal despite CESTAT Rules mandating separate appeals when multiple parties are aggrieved. This, too, is supported by High Court rulings. Overall, the respondents assert that the impugned order is arbitrary, unsupported by evidence, contrary to law, and passed without considering vital submissions, warranting its complete annulment. Case Details Case Title: Commissioner Of Customs, Airport Special Cargo Versus Epsilon Eye Care Pvt. Ltd. Case No.: Diary No(s). 59378/2025 Date: 17-11-2025 Counsel For Petitioner: N.venkataraman, A.S.G. Counsel For Respondent: Dr. Sujay Kantawala, Adv. Click Here To Read Order

Supreme Court Dismisses Customs Appeal; Says Importer Held Valid Licence on Date of Adjudication

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