I.G. International Pvt Ltd Vs Principal Commissioner of Customs (NS-I) (CESTAT Mumbai)
Summary: CESTAT Mumbai allowed the appeals of I.G. International Pvt. Ltd. and its Director and set aside the Order-in-Original dated 17.03.2026 by which Customs had rejected the declared CIF transaction value of fresh Royal Gala apples imported from Brazil through M/s Blue Whale SAS, France. The imports, made during March 2020 to May 2023, were under an annual commercial agreement on CIF terms. Blue Whale sourced the apples from Agropecuaria Schio LTDA, Brazil. The Tribunal noted that the appellant had no contractual privity, tripartite arrangement or direct dealing with the Brazilian supplier; its relevant transaction was the CIF purchase from Blue Whale. DRI alleged that the appellant had declared the FOB value appearing in the Brazilian supplier’s upstream documents as its CIF value without adding actual freight and insurance. The show cause notice consequently proposed enhancement of the declared assessable value of non-provisionally assessed Bills of Entry from Rs.1,40,14,24,479/- to Rs.1,72,24,72,392/-, with differential duty of Rs.16,05,23,957/-, besides a net demand of Rs.1,50,96,799/- concerning 33 provisionally assessed Bills of Entry. Confiscation and penalties were also proposed.
The Tribunal held that Section 14(1) of the Customs Act, 1962 read with Rule 3(1) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 makes the transaction value—the price actually paid or payable for goods sold for export to India—the primary basis of customs valuation. Revenue had produced no evidence that the appellant paid Blue Whale any amount exceeding the declared CIF invoice value. On the contrary, CA-certified reconciliation showed that remittances were marginally lower than the declared assessable value. There was no evidence of extra consideration, flow-back, payment of freight by the appellant or reimbursement of freight or insurance to Blue Whale. Rule 10(2) permitted addition of freight and insurance only to the extent those elements were not already included in the price. Since the contract and invoices were on CIF terms, freight had been prepaid abroad by Blue Whale and the shipping company’s invoices were raised on Blue Whale, no further addition could be made merely on assumption.
