CESTAT Bangalore- Customs directed to restore the full sale value of the auctioned goods

“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 05.05.2025

CESTAT Bangalore- Customs directed to restore the full sale value of the auctioned goods

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore Bench, in its Final Order No. 20530/2025 dated 30 April 2025, has ruled in favour of M/s. Wipro Ltd., allowing restitution of value for imported goods that were auctioned by the Revenue despite the matter being sub judice.

Case Background:

Appellant: M/s. Wipro Ltd., Bangalore
Goods: Service application module imported from Cisco Systems, Mexico
Declared Value: USD 26,400
Revenue’s Enhancement: Value re-determined to USD 1,10,000 based on list price of similar goods
Penalty Imposed: Rs. 2,00,000 under Section 112(a) of Customs Act
Redemption Fine: Rs. 50,000 under Section 125
Goods Status: Auctioned in 2013 while appeal was pending

Key Legal Issues:

Whether the declared value of replacement goods can be rejected arbitrarily?
Whether auction of confiscated goods during pendency of appeal is legally valid?
Whether the importer is entitled to restitution of sale value post auction?

Tribunal’s Observations:

The impugned goods were replacement for defective parts earlier imported and supplied free of charge.
Original import was at a 76% discount from list price, supported by Cisco certification.
Comparison with another importer (HCL Ltd.) was found inappropriate as there was no basis to ignore documentary evidence from Wipro.

Illegal Auction Conduct:

The goods were auctioned on 07.11.2013 without post-adjudication notice to Wipro.
Department relied on pre-confiscation letters issued by the custodian, not valid after adjudication.
Tribunal cited rulings from Shilp Impex, Intersales, and Mohammed Yaseen which held that auctioning goods while appeal is pending is illegal.

Final Order:

Appeal allowed.
Impugned order set aside.
Revenue directed to restore the sale value of auctioned goods to Wipro Ltd.

Legal Significance:

This decision reinforces that:

Replacement goods supplied free of cost should not be arbitrarily re-valued.
Authorities cannot auction goods under appeal without due notice and permission.
Restitution must be granted when departmental overreach leads to loss of property during pending litigation.

Listen to this on our #YouTube Channel

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

We offer Legal advice and litigation support in matters related to Indirect Tax-Customs, FTP, other Indirect Tax matters & Arbitration law, all sorts of Central licensing and related matters. Come and explore the new way of doing business with us!

Source: CESTAT Bangalore

Disclaimer

Handy Download:

CESTAT Bangalore OrderDownload

Connect with us for more-

@ Team S J EXIM SERVICES, New Delhi, IN

CP: Ms. Shubhra Jha, Founder

Tel: +91-11-4999 2707 I +91-9999005693

Web: www.sjexim.services

EMAIL: operations@sjexim.services I shubhra@sjexim.services

Facebook: www.facebook.com/sjeximservices

LinkedIn: https://www.linkedin.com/company/90794255/admin/feed/posts/