Rochi Ram & Sons Vs Commissioner of Customs (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, decided five connected appeals challenging an order passed by the Commissioner of Customs, Jaipur, which had rejected the declared value of imported watch parts and watch movements, re-determined their value, confirmed a differential customs duty demand of Rs. 5.53 crore with interest, confiscated the goods, imposed redemption fine, and levied penalties on the importer and other individuals.
The appeals had earlier been remanded pending the issue of the Directorate of Revenue Intelligence’s (DRI) authority to issue show cause notices. Following the Supreme Court’s decision recognising the DRI’s competence to issue such notices, the Tribunal proceeded to decide the appeals on merits despite the absence of the appellants, relying on the Supreme Court’s ruling that an appeal cannot be dismissed for non-prosecution and must be decided on merits.
The appellants challenged the rejection of the declared transaction value, re-determination of customs value, confirmation of differential duty, confiscation of goods, imposition of penalties, denial of cross-examination, reliance on third-party documents, inclusion of notional freight, invocation of the extended limitation period, and simultaneous penalties under Sections 112 and 114A of the Customs Act. The Revenue argued that the importer and related firms were controlled by the same family, imported goods from related Hong Kong entities without disclosing the relationship, produced duplicate invoices showing lower values before Customs, paid differential amounts in cash, and therefore the declared transaction value was liable to be rejected under Rule 10A of the Customs Valuation Rules.
