Customs Act | Once SCN States Market Value Of Seized Goods, Burden Lies On Noticee To Disprove It: Delhi High Court

The Delhi High Court has recently held that once the market value of goods seized by the Customs is specified in a show cause notice, the burden lies on the one who recieved notice to disprove the valuation with cogent material, and a mere denial is insufficient to seek interference in appellate proceedings.

A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul was hearing an importer's appeal challenging concurrent findings of the Customs adjudicating authority and CESTAT, which had upheld confiscation and penalties in a case relating to smuggling of foreign-origin cigarettes.

The market value of the seized goods was assessed to be Rs.3,50,16,800/, on the basis of a survey conducted by the Department.

The Appellant however argued that the value of the goods, which forms the statutory ceiling for penalty, was not legally and validly determined and is based on the vague assertion of market survey.

It was further argued that the method adopted by the Customs for valuation of the goods was not disclosed and no documentary evidence in support thereof was supplied.

Dismissing the appeal, the High Court observed,

“Once the respondent has issued a show cause notice on the point of the cost of a cigarette stick based on the market value, the burden shifts on the appellant to demonstrate that the evaluation, as was reached to, was incorrect or improper and he should have substantiated his contention to that effect.”

The Court added that the appellant was expected to discharge his burden by “demonstrating” that the goods were not properly valued; however, the appellant was merely in denial mode.

“The appellant, in our opinion, has raised completely vague and non-specific plea not only before the authorities below but also failed to establish his case based on the statutory provisions,” it remarked.

The Court also took note of the fact that the Appellant's statement recorded under Section 108 of the Customs Act had not been retracted, lending further credence to the Department's case.

As such, the Court dismissed the appeal.

For Appellant: Advocates Rahul Raheja, Gaurav Prakash and Rohit Raheja

For Respondent: Advocate Gibran Naushad, Senior Standing Counsel with Suraj Shekhar Singh and Harsh Singhal