CESTAT Mumbai: Import Value Cannot Be Enhanced Without Evidence; Flipkart Wins Relief in Power Bank Valuation Dispute

March 09, 2026 : The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that re-determination of import value in the absence of cogent evidence of undervaluation is legally unsustainable, granting relief to Flipkart India Pvt. Ltd. in a dispute concerning imported power banks.

The Bench comprising Judicial Member Justice S.K. Mohanty and Technical Member M.M. Parthiban allowed the appeal and set aside the enhancement of assessable value, confiscation of goods, and imposition of redemption fine and penalty.

Background
The dispute arose from the import of 28,600 units of “Power Bank 5200mAH” by Flipkart from Xiaomi Singapore PTE Limited. The importer declared a unit value of US$ 3.64 in the Bills of Entry. Upon examination, customs authorities found no discrepancy in description, markings, or labelling compliance.

However, the Department rejected the declared transaction value and enhanced it to ₹454.50 per unit based on contemporaneous import data of similar goods, particularly relying on a single transaction involving another importer. This led to confiscation under Section 111(m) of the Customs Act and imposition of penalties, which were upheld by the Commissioner (Appeals).

Appellant’s Case
Flipkart contended that the imports were part of a larger supply agreement for 2,00,000 units at the same price, out of which 1,71,400 units had already been cleared at the declared value without objection. It argued that:

• Authorities ignored contemporaneous imports of identical goods by the appellant itself.
• Reliance on a single transaction of another importer was improper.
• The comparison failed to account for differences in commercial level (wholesale vs retail) and quantity.
• There was no evidence of additional consideration or flowback of money.

Revenue’s Stand
The Department maintained that the declared value was low and justified enhancement based on contemporaneous import data. It also alleged mis-declaration due to discrepancies in INCOTerms between the proforma and final invoices.

Tribunal’s Findings
The Tribunal ruled decisively in favour of the importer, emphasizing the primacy of transaction value under Section 14 of the Customs Act. Key findings include:

• No valid rejection of transaction value: The Department failed to produce evidence of undervaluation or additional consideration.
• Violation of valuation rules: Authorities did not follow the mandatory sequential application of the Customs Valuation Rules before resorting to Rule 5.
• Improper reliance on single transaction: The re-determined value was based solely on one import of 10,000 units, ignoring larger contemporaneous imports of identical goods by the appellant.
• Lack of comparability: The relied-upon transaction differed in commercial level and quantity, making it unsuitable for valuation comparison.
• No mis-declaration: The Tribunal accepted that the imports were on a CIP basis, supported by the supply agreement and supplier clarification.
• No basis for confiscation or penalty: In the absence of valuation irregularity or mis-declaration, penal consequences could not be sustained.

The Bench observed that the entire process of re-determining value was “contrary to law and factually incorrect,” and reiterated that suspicion or price difference alone cannot justify rejection of declared value without supporting evidence.

Conclusion
Setting aside the impugned order, the Tribunal allowed the appeal with consequential relief, reinforcing that customs valuation must adhere strictly to statutory rules and evidentiary standards.

Case Details:

Coram: Justice S.K. Mohanty (Judicial Member), M.M. Parthiban (Technical Member)

Case Title: Flipkart India Pvt. Ltd. v. Commissioner of Customs (Import)

Case Number: Customs Appeal No. 89472 of 2018

Decision Date: 09.03.2026