Section 108 Admissions and Parallel Invoices Sustain Hop Undervaluation Demand: CESTAT New Delhi

The Customs, Excise and Service Tax Appellate Tribunal, New Delhi upheld a ₹1.84 crore duty demand, confiscation and penalties on hop importers, relying on statements under Section 108 and genuine invoices from Germany.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi has upheld the rejection of declared value and a differential duty demand of ₹1,83,65,433 on imports of hop products, holding that statements recorded under Section 108 of the Customs Act, 1962 were rightly relied upon together with documentary evidence of parallel invoices [Harpreet Singh v. Principal Commissioner of Customs, ACC (Import), New Delhi, 2026-juristway.com-3398-CESTAT(New Delhi)-Customs].

Dr. Rachna Gupta, Officiating President, wrote the order for a Bench with P.V. Subba Rao, Member (Technical), in four appeals by Agya Imports and three individuals. The appeals were decided on the Revenue’s submissions after the appellants failed to argue despite more than 18 adjournments and a final warning. Hop pellets and extracts, used in brewing, were alleged to have been imported between December 2013 and January 2016 at a declared value of ₹84,40,716 against a true value of ₹4,90,47,116.

The Tribunal noted that Section 108 obliges a person summoned to state the truth and deems the inquiry a judicial proceeding. Following Illias v. Collector of Customs, Madras (1969) and K.I. Pavunny v. Assistant Collector (1997 INSC 84), it held that customs officers are not police officers, so such statements are admissible as substantive evidence, and an admission needs no further proof.

It noted its own earlier view that statements become relevant only once the procedure of Section 138B is followed, but held that the appellant’s statement was rightly relied upon in view of the statutory provisions and the distinguishing facts.

The statements were corroborated by e‑mails from German suppliers, airline and insurance records, bank documents and reports of German Customs confirming genuine invoices, while the exporters denied the lower‑value invoices. The Tribunal held that value was rightly rejected under Rule 12 and redetermined sequentially under the 2007 Valuation Rules.

The demand under Section 28(4), confiscation under Section 111(m), an equal penalty under Section 114A on the importer, and penalties under Sections 112 and 114AA on the others were upheld, and all four appeals were dismissed.

2026-juristway.com-3398-CESTAT(New Delhi)-Customs