Generic PVC Fabric Description Not Misdeclaration; NIDB Value Rejection Quashed by CESTAT

Shyam Rexin Trading Pvt. Ltd. Vs Commissioner of Customs (CESTAT Delhi)

In this case, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi examined an appeal filed by the appellant challenging an order passed by the Commissioner of Customs, ICD Patparganj. The Commissioner had confirmed a differential duty demand of ₹46,76,106 along with interest, imposed a redemption fine of ₹5,00,000, and levied a penalty. The proceedings arose from imports of PVC coated fabrics made under seven Bills of Entry in November 2022. The importer had waived issuance of a show cause notice.

The goods were declared as “PVC coated fabrics” and classified accordingly. However, upon testing by the Central Revenue Control Laboratory (CRCL), the goods were identified as non-textured polyester filament yarn fabric with PVC coating. Based on this finding, the department rejected the declared transaction value under Rule 12 of the Customs Valuation Rules, 2007 and re-determined the value using NIDB (National Import Database) data under Rules 4 and 5. The assessable value was increased from ₹88.72 lakh (declared) to ₹1.17 crore, resulting in a higher duty liability. The goods were also confiscated under Section 111(m), with an option for redemption on payment of fine.

The appellant challenged the order on multiple grounds. It was argued that the transaction value had been rejected without establishing reasonable doubt about its truth or accuracy, as required under the Valuation Rules. The appellant contended that reliance on NIDB data alone was insufficient and that the Commissioner failed to consider essential parameters such as quality, quantity, supplier, and commercial level. It was further submitted that the investigation report itself noted absence of comparable NIDB data, creating inconsistency in the department’s approach. The appellant also argued that the law requires adoption of the lowest contemporaneous value, whereas the Commissioner adopted representative values after excluding outliers. It was emphasized that no evidence existed of additional payments beyond the declared value, and therefore the transaction value should have been accepted. The appellant also denied any mis-declaration of goods and contested the imposition of confiscation, fine, and penalty.