Garg Impex Vs Commissioner of Customs-ICD (CESTAT Chandigarh)
In a significant ruling for importers, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Chandigarh Bench has declared that the value of imported goods cannot be enhanced solely on the basis of an alert issued by the Directorate of Revenue Intelligence (DRI). The tribunal also affirmed that importers are entitled to exemption from Countervailing Duty (CVD) on Polyester Knitted Fabric, drawing on previous judgments from the Supreme Court and other CESTAT benches.
The consolidated judgment, delivered on May 19, 2025, addressed nine appeals filed by M/s Garg Impex and M/s Sedna Impex India Pvt Ltd. These companies, engaged in importing and trading Polyester Knitted Fabric from China, challenged orders from the Commissioner of Customs (Appeals) that had upheld value enhancements and denied certain exemptions.
Background of the Dispute
The appellants had imported multiple consignments of Polyester Knitted Fabric, filing Bills of Entry with declared values as per commercial invoices. While physical examination confirmed the goods matched declarations, the Assessing Authority provisionally enhanced the declared value. This enhancement was based solely on a DRI alert from May 9, 2011, which suggested higher import prices for Polyester Knitted Fabric (USD 2.80 to USD 5.15 per KG). Under pressure for urgent clearance and to avoid demurrage charges, the appellants deposited the duty on the enhanced value.
