Commissioner of Customs Exports Vs K G Exports (Delhi High Court)
Summary: The Delhi High Court, in Commissioner of Customs Exports Vs MS K G Exports, examined the maintainability of departmental customs appeals involving amounts below the monetary threshold of ₹1 crore prescribed by the Central Board of Indirect Taxes and Customs (CBIC). The Division Bench comprising Justice Avneesh Jhingan and Justice Shail Jain, by order dated 28 October 2026, expressed concern over the Customs Department continuing to institute appeals despite binding instructions intended to reduce government litigation. The Court directed the Chief Commissioner of Customs, Delhi, to remain personally present at the next hearing to explain the procedure adopted for ensuring uniform implementation of the instructions.
The proceedings arose from two connected appeals, CUSAA 176/2025 concerning M/s K G Exports and CUSAA 182/2025 concerning Manish Dua. Both appeals were instituted under Section 130 of the Customs Act, 1962, challenging CESTAT Final Order Nos. FO/C/A/50827-50828/2025-CU(DB), dated 4 June 2025. The respondents raised a preliminary objection that the appeals were not maintainable because the amounts involved were below the prescribed monetary limit. They further submitted that neither appeal fell within the exceptions specified in the instructions dated 2 November 2023“>CBIC instructions dated 2 November 2023.
The Customs Department contended that the underlying issue was recurring in nature. Its counsel submitted that the Delhi High Court’s decision in Amit Exports v. Union of India & Ors., 2024:DHC:9009-DB, had been followed by CESTAT in numerous matters and was presently pending consideration before the Supreme Court. The Department further argued that the controversy involved interpretation of Section 108 of the Customs Act, particularly whether statements were required to be recorded before the adjudicating authority. According to the Department, the issue arose in several cases and therefore warranted appellate consideration.
The High Court examined the CBIC instructions issued on 2 November 2023 under Section 131BA of the Customs Act, 1962. These instructions prescribe monetary thresholds of ₹50 lakh for appeals before CESTAT, ₹1 crore for appeals before High Courts and ₹2 crore for appeals before the Supreme Court. They also identify exceptions relating to challenges to constitutional validity, notifications or instructions held illegal or ultra vires, and classification or refund issues of a legal and/or recurring nature. The Court recorded that the Department did not contend that the disputed amount exceeded ₹1 crore. It also observed that the appeals had not been pleaded or argued as involving classification issues.
The Bench expressed concern that the Department continued to file appeals notwithstanding instructions designed to reduce government litigation. It noted that the matter was not an isolated instance and recalled that, on 17 March 2026, counsel for the Department had sought time to obtain instructions concerning maintainability in light of the monetary limits. The Court considered it necessary to examine how the CBIC instructions were being implemented across Commissionerates rather than leaving their application to the discretion of individual offices.
Accordingly, the High Court directed the Chief Commissioner of Customs, Delhi, to remain physically present before the Court on the next hearing date to assist it regarding the procedure adopted for uniform implementation of the instructions. The matter was listed for 20 November 2026 at 10:30 a.m. in the Supplementary List. Importantly, the order did not finally determine the maintainability of the appeals or decide the underlying interpretation of Section 108 of the Customs Act. The proceedings therefore remained pending.
Cases Discussed
Amit Exports v. Union of India & Ors. (Delhi High Court), 2024:DHC:9009-DB: The Customs Department relied on this judgment concerning interpretation of Section 108 of the Customs Act. It submitted that the decision had been followed in several CESTAT matters and was pending before the Supreme Court. The present order did not reconsider or determine the merits of that judgment.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. These appeals are filed under Section 130 of the Customs Act, 1962 (for short ‘the Act’) against the final order no.FO/C/A/50827-50828/2025-CU(DB) dated 04.06.2025 passed by the learned Customs, Excise & Service Tax Appellate Tribunal (for short ‘CESTAT’).
2. The preliminary objection raised by learned counsel for the respondent is that in view of the instructions issued by the Central Board of Indirect Taxes and Customs (CBIC) dated 02.11.2023 (hereinafter ‘the instructions’), the appeal is not maintainable as the amount involved is less than the prescribed monetary threshold in the instructions. The submission is that the case does not fall within any of the exceptions carved out in the instructions.
3. Learned counsel for the appellant submits that the issue is of recurring nature. It is further contended that the judgment of this Court in Amit Exports v. Union of India & Ors. 2024:DHC:9009-DB has been followed in plethora of cases by the CESTAT but is currently pending before the Supreme Court. The issue of interpretation of Section 108 of the Act is involved to the effect as to whether the statement is to be recorded before the adjudicating authority or not and this issue arises in several matters.
4. It is not the case set up by the appellant that the amount involved in the appeal exceeds the prescribed monetary limit of rupees one crore.
5. The instructions dated 02.11.2023 are reproduced below:
390/Misc/30/2023-JC
F. No. 390/Misc/30/2023-JC
Ministry of Finance, Department of Revenue
Central Board of Indirect Taxes & Customs
(Judicial Cell)
*****
‘B’ Wing, 4th Floor, HUDCO VISHALA Building
Bhikaji Cama Place, R. K. Puram, New Delhi-66
Date- 02.11.2023
INSTRUCTION
Subject: Reduction of Government litigation – providing monetary limits for filing appeals by the Department before CESTAT, High Courts and Supreme Court – regarding
In exercise of the powers conferred by Section 131BA of the Customs Act, 1962 and in partial modification of earlier instruction issued from F. No. 390/Misc./163/2010-JC dated 17.08.2011, the Central Board of Indirect Taxes & Customs (hereinafter referred to as the Board) fixes the following monetary limits below which appeal shall not be filed inthe CESTAT, High Court and the Supreme Court:
| S. No. | Appellate Forum | Monetary limit |
|---|---|---|
| 1 | SUPREME COURT | Rs. 2 Crore |
| 2 | HIGH COURTS | Rs. 1 Crore |
| 3 | CESTAT | Rs. 50 Lakh |
2. Adverse judgments relating to the following should be contested irrespective of the amount involved:
a) Where the constitutional validity of the provisions of an Act or Rule is under challenge;
b) Where Notification/ Instruction/ Order or Circular has been held illegal or ultra vires;
c) Classification and refund issues which are of legal and/ or recurring nature.
3. Withdrawal process in respect of pending cases in above forums, as per the above revised limits, will follow the current practice that is being followed for the withdrawal of cases from the Supreme Court, High Courts, and CESTAT.
5. The three exceptions carved out in the instructions are:
i. Challenge to the constitutional validity of the provisions of an Act or rule.
ii. Challenge to the notification/ instructions/ order or circular held to be illegal or ultra vires
iii. The issue of classification and refund of legal and/or recurring nature.
6. It is neither argued nor pleaded that the issue involved in the appeal is that of classification. It is not the one sole case where the department despite the binding instructions issued with an object to reduce government litigation continues to file appeals in utter defiance.
7. On 17.03.2026, learned counsel for the appellant sought time to have instructions regarding the maintainability of the appeal in view of the instructions issued fixing the monetary limits.
8. The Chief Commissioner of Customs, Delhi is directed to remain physically present before this Court on the next date of hearing to assist on the procedure being adopted to ensure uniform implementation of the instructions rather than leaving it at the discretion of the individual Commissionerates.
9. Put up on 20.11.2026 at 10:30 a.m. in the Supplementary List.
