Custom, Excise & Service Tax Tribunal
Hrb Boarding & Lodging Pvt Ltd vs Chennai (Port Export) on 4 February, 2026
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL, CHENNAI
Customs Appeal No. 42801 of 2014
(Arising out of Order in Appeal C. Cus. II No. 112/2014 dated 31.10.2014 passed by
the Commissioner of Customs (Appeals - II), Chennai)
HRB Boarding & Lodging Pvt. Ltd. Appellant
No. 307, Valluvar Kottam High Road
Nungambakkam, Chennai - 600 034.
Vs.
Commissioner of Customs Respondent
Chennai II Commissionerate Customs House 60, Rajaji Salai, Chennai - 600 001.
APPEARANCE:
Shri Hari Radhakrishnan, Advocate for the Appellant Smt. Anandalakshmi Ganeshram, Authorised Representative for the Respondent CORAM Hon'ble Shri M. Ajit Kumar, Member (Technical) Hon'ble Shri Ajayan T.V., Member (Judicial) FINAL ORDER NO.40182/2026 Date of Hearing: 21.08.2025 Date of Decision: 04.02.2026 Per M. Ajit Kumar, The present appeal has been instituted by the appellant assailing Order-in-Appeal No. C. Cus. II 112/2014 dated 31.10.2014, passed by the Commissioner of Customs (Appeals-II), Chennai (hereinafter referred to as "the impugned order").
2. Brief facts of the case are that the appellant-importer had filed three Bills of Entry, bearing Nos. 5542435, 5542440 and 5543616, all dated 20.05.2014, through their Customs House Agent, M/s Cleford Shipping Ltd., seeking clearance of goods declared as Engineered Marble imported from China and classified under CTH 6802 9990. The 2 declared unit prices for the said consignments were USD 46.56, USD 46.56 and USD 37.78 per square meter, respectively. As per the mandate of DGFT Notification No. 18 (RE-2008) dated 04.08.2011, imports of goods falling under CTH 6802 2190 are permitted freely only where the CIF value is not less than the prescribed minimum floor price of USD 60 per square meter. In the instant case, the declared values were admittedly below the statutory floor price, thereby rendering the import in contravention of the prevailing import policy and attracting the consequences applicable to restricted imports. Consequent to the appellant's written request dated 08.07.2014 seeking adjudication without issuance of a Show Cause Notice and without grant of personal hearing, the Adjudicating Authority ordered enhancement of the value of the goods to USD 60 and the confiscation of the same, permitting redemption on payment of a fine of Rs. 10,00,000/-. A penalty of Rs. 2,00,000/- was also imposed under Section 112(a) of the Act for rendering the goods liable to confiscation. The first appellate authority, vide the impugned order, upheld the findings and conclusions of the Adjudicating Authority. Aggrieved thereby, the present appeal has been filed before this Tribunal.
3. The learned Advocate Shri Hari Radhakrishnan appeared for the appellant and Ld. Authorized Representative Smt. Anandalakshmi Ganeshram appeared for the respondent.
4. We have heard the parties to the dispute and have perused the appeals and connected papers.
5. The appellant has made the following submission; 3 A. The appellant submitted that the DGFT has no jurisdiction to prescribe a minimum import value (MIP), citing Bimal Kumar Modi v. UOI, 2014 (306) ELT 97 (Cal).
B. It was submitted that the adjudicating authority wrongly imposed fine and penalty instead of merely assessing duty on the DGFT-fixed value.
C. Without prejudice, Ld. Counsel submitted that the marble slabs were for personal use, and under Rule 17 of the Foreign Trade (Regulation) Rules, 1993, no confiscation could be ordered. D. Their appeal before the First Appellate Authority was dismissed on the grounds that:
i. There was no evidence that the goods were for personal use.
ii. The relied-upon case law arose from writ jurisdiction and need not bind the Commissioner (Appeals).
E. Counsel requested that the appeal be kept in abeyance pending disposal of Writ Appeal No. 1554/2015 before the Madras High Court.
The writ appeal challenges DGFT Notification No. 65 (RE-2010)/ 2009-2014 dated 04.08.2011 imposing MIP of USD 60/sq. m.
F. Reliance was placed on S. Mira Commodities Pvt. Ltd. v. UOI, 2009 (235) ELT 423 (Mad), which held that price fixation must follow the Customs Act and Tariff Act, not the FTDR Act.
G. The Kerala High Court has held that Section 5 powers to frame import policy cannot be delegated to the DGFT; therefore, DGFT-
issued notifications fixing MIP are without jurisdiction.
H. It was argued that High Court judgments even in writ petitions are binding precedents for legal interpretation, citing i. Bhor Industries Ltd. v. UOI, 1980 (6) ELT 752 4 ii. Surat Cotton Spinning Mills Ltd. v. Collector, 1984 (16) ELT
321.
I. Section 17 of the FTDR Act bars confiscation of goods intended for personal use; the Commissioner (Appeals) wrongly rejected this as an afterthought.
J. DGFT price fixation is analogous to Tariff Value under the Customs Act; once value enhancement is accepted for duty assessment, confiscation is unjustified.
K. The goods are freely importable under the Exim Policy if valued at USD 60/sq.m; Section 111(d) does not apply because the goods are neither prohibited nor restricted.
L. The appellant waived SCN and personal hearing only to avoid demurrage, not as acceptance of fine/penalty; the contrary interpretation is arbitrary.
M. There was no undervaluation, no intent to trade, and valuation was enhanced solely due to DGFT's MIP.
N. Due to delays, the appellant incurred Rs. 6,48,215/- in container detention and storage charges, and construction was delayed. Hence demurrage and profit margin should have been considered when imposing redemption fine; this was not done.
O. Counsel submitted that MIP fixed by DGFT under the FTDR Act cannot be used for Customs valuation, being:
i. Neither tariff value under Section 14(2) of the Customs Act ii. Nor best-judgment value under the 2007 Valuation Rules (citing Prabhat Steel Traders Pvt. Ltd., 2019 (366) ELT 5449).
P. Counsel prayed that:
i. Fine and penalty be set aside; and
5
ii. Assessment be revised to transaction value with consequential relief.
6. The Ld. A.R. has stated that the Hon'ble Madras High Court has decided the issue raised by the appellant vide Oder dated 11.06.2015 [HRB Boarding & Lodging Pvt. Ltd. Vs UOI - 2015 (322) ELT 452 (Mad.)] and hence the matter may be decided on merits. She reiterated the findings in the impugned order. Further she stated that the cited High Court judgment has held that the goods were rightly confiscated for having declared the goods below USD 60. She hence prayed that the appeal may be rejected.
7. We must at this stage express considerable surprise that the Ld. Counsel for appellant was unaware of the decision of the Hon'ble High Court in their own case even after a decade of its passing, to the extent of requesting this Bench to have the hearing postponed pending outcome of the matter before the Hon'ble High Court. An appellant seeking relief before the Tribunal is obligated to make a full, fair, and true disclosure of all material facts pertinent to the relief claimed, and stating the applicable law. While the Tribunal is presumed to know the law, it is not presumed to know the facts. Complete disclosure is therefore indispensable, especially since the Tribunal ordinarily accepts the submissions and averments of parties at face value, assuming they are made candidly, in good faith and with clean hands. In the circumstances we appreciate the assistance given by the Ld. A.R. Smt. Anandalakshmi Ganeshram in bringing the said judgment to our notice. The relevant paras of the judgment are extracted below:
"19. It is to be noted that the petitioners have come forward with the present Writ Petitions challenging 6 only the Notification No. 65, dated 4-8-2012 by which, it seems that the petitioners are aggrieved by imposition of floor price at US $60 per sq.mt. and they had no grievance in respect of earlier Notifications, which imposed US $ 50 per sq. mt. As discussed above, it is no doubt true that the DGFT has no power to amend the policy. However, it is to be noted that the Central Government made the amendments in the Schedule 1 (Imports) of the ITC (HS) Classifications of Export and Import Items, by publishing in the Gazette of India Extraordinary Part II in terms of above referred to Section 3(2) of FTDR Act, in and by which, the Import under the Exim Codes 6802 10 00, 6802 21 10, 6802 21 20, 6802 21 90, 6802 91 00 and 6802 92 00 were permitted freely provided CIF value is US $ 60 and above per square metre. This was given effect to by the DGFT by the Notification No. 65 (RE-2010)/2009-2014, which has been impugned in these writ petitions. In fact, the Notification announcing the Foreign Trade Policy, 2009- 2014 was published under the aegis of the DGFT who is also an Ex-Officer Additional Secretary to the Government of India. Therefore, the DGFT not only assumes the power as a delegatee of the Central Government under Section 6 of the FTDR Act, but also competent as an authorized officer on behalf of the Central Government. The DGFT discharges the official functions allotted to him as a limb of the Central Government but also as a delegatee under Section 6 of the FTDR Act.
20. In the present case, the DGFT has not resorted to change of categorization of items, i.e. from the category of 'free export' to category of 'restricted export', but as a sequel to earlier notification No. 18, which fixed the floor price of US $ 50 per square meter, the present impugned Notification has been issued. Therefore, I do not find any illegality or irregularity in the impugned notification in order to interfere with the same. The reliance placed upon "M/s. Mira Commodities case and M/s. Bimal Kumar Modi case by the learned counsel for the petitioner, cannot be made applicable to the present case inasmuch as in the said decisions, it has been held that the DGFT has resorted to amend the import & export policy, which is not permissible under the provisions of FTDR Act, but in exercise of Section 5 of the FTDR Act, the Central Government is only empowered to formulate and announce the export and import policy.
21. Therefore, when the DGFT Notification dated 4- 8-2011 allowed free import of marble blocks/tiles provided the CIF value is US $ 60 and above per sq. mt., the petitioners were expected to declare the same, however, contrary to the same, they have declared below the US $ 60 and thereby, the authority 7 has rightly confiscated the same and therefore, confiscation of the goods is justified.
22. For the foregoing discussion, these Writ Petitions fail and they are dismissed. No costs. However, it is made clear that as against the impugned order of confiscation, the petitioner can work out appeal remedy in the manner known to law. On such approach, the authority concerned, is directed to entertain the appeal preferred by the petitioners and dispose of the same in accordance with law. No costs. Consequently, connected MPs are closed."
(emphasis added)
8. We find that the contravention of DGFT Notification No. 18(RE)/2008 is not contested by the appellant. It was however submitted by them that the adjudicating authority wrongly imposed fine and penalty instead of merely assessing duty on the DGFT-fixed value and further that Section 17 of the FTDR Act bars confiscation of goods intended for personal use.
9. We find that the appellants challenge to DGFT Notification No. 18(RE)/2008, before the Hon'ble Madras High Court has not met with success. In fact the Hon'ble High Court judgment has also upheld the confiscation of the goods in terms of the DGFT notification, for having declared the value below USD 60. However, we note that the judgment permits the appellant to work out an appeal remedy against the confiscation. We hence examine the appeal.
10. The valuation rules under the Customs Act and the value-based restrictions prescribed in the DGFT notification operate in distinct domains. Under the Customs Act and the Rules framed thereunder, the assessable value is determined on the basis of the declared transaction value for the purpose of applying the ad valorem duty. In contrast, the value mentioned in the DGFT notification is meant to regulate the 8 permissibility of importing the goods in question. Accordingly, it was incumbent upon the Proper Officer to first evaluate the declared transaction value strictly in terms of the Customs Act and the Valuation Rules. If the transaction value was correctly declared and happened to be lower than the minimum value permitted for free import as per the DGFT notification, the officer, after accepting the declared value, could have imposed penalties and taken action for violation of the DGFT notification, as provided by law. However, in the present case, the Adjudicating Authority without taking recourse to the Customs Valuation Rules has by 'ORDER' enhanced the declared value not on the basis of any findings on any misdeclaration of value or irregularity under the Customs Act, but solely to align the goods with the "policy conditions" under the Customs Tariff Act, 1975. We hence find force in the Ld. Counsel's submission. In the circumstances, once the value is enhanced and aligned to USD 60 for import purposes, the goods are purged of the taint and are to be treated as compliant with DGFT Notification No. 18(RE)/2008, irrespective of the fact that such enhancement of value stems from departmental action. Hence if the importer does not contest the enhanced value, as in this case, the goods become freely importable and are no longer liable to penal consequences. This being so all other issues raised by the appellant looses relevance.
11. In the circumstances the confiscation of the goods and the redemption fine on the goods along with the penalty on the importer as imposed, merits to be set aside. We accordingly modify the impugned order by setting aside the confiscation, fine and penalty. For 9 clarity we state that the goods may be released after payment of duty as per the enhanced value. The appellant is eligible for consequential relief as per law and the appeal is disposed of accordingly.
(Order pronounced in open court on 04.02.2026) Sd/- Sd/-
(AJAYAN T.V.) (M. AJIT KUMAR) Member (Judicial) Member (Technical) Rex