CESTAT Rules Reliance’s Indonesian Steam Coal Imports Not Overvalued, Supreme Court to Hear Customs Appeal [Read Order]
The Tribunal had held that the imports were not liable for confiscation under Section 111(m) of the Customs Act, rejecting allegations of misdeclaration and undervaluation. The Supreme Court flagged prior dismissals in similar cases and directed the ASG to clarify maintainability
CESTAT Rules
CESTAT Rules
In a significant development in the Reliance’s Indonesian steam coal valuation controversy, the Supreme Court is to hear a customs appeal filed by the Revenue against a detailed final order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai.
The Tribunal had granted full relief to Rosa Power Supply Company Ltd. and Reliance Infrastructure Ltd., holding that their Indonesian steam coal imports were not overvalued.
The dispute arose from show cause notices issued by the Directorate of Revenue Intelligence (DRI), alleging that the importers had undervalued their coal consignments by routing payments through overseas intermediaries.
The Revenue proposed to redetermine the transaction value of imports to ₹12,045.99 crore for Rosa and ₹7,154.46 crore for Reliance Infra, and sought confiscation under Section 111(m), along with penalties under Sections 112 and 114AA.
The Tribunal, however, rejected the Revenue’s case in its final order dated 23 July 2025. It held that the declared transaction values could not be discarded under Rule 12 of the Customs Valuation Rules, 2007, as there was no evidence of misdeclaration or suppression.
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The Tribunal emphasised that the goods had already been cleared for home consumption and that invoking confiscation provisions post-clearance was jurisdictionally flawed. It also dropped all penalty proposals, noting the absence of mens rea and any fraudulent intent.
The Tribunal further criticised the Committee of Chief Commissioners for misusing the review mechanism under Section 129D of the Customs Act to challenge settled law. It was observed that the Revenue’s attempt to override binding precedent amounted to judicial indiscipline and undermined the finality of assessments.
Aggrieved by the Tribunal’s findings, the Revenue approached the Supreme Court.
The Divisional Bench comprising Justice Sanjiv Khanna and Justice Dipankar Datta admitted the appeal after condoning the delay. During the hearing, advocates, appearing for the respondents, pointed out that the Supreme Court had previously dismissed or closed several identical appeals filed by the Revenue in similar matters involving other power companies.
Taking note of this, the Bench directed Additional Solicitor General N. Venkataraman to examine the earlier dismissals and clarify whether the present appeal was distinguishable or maintainable in light of those precedents.
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