Customs Dept appeals CESTAT Order in favour of Lulu International Malls in Trampoline Import Case: Supreme Court takes up Matter [Read Order]
The Bench directed that the matter be listed again on October 31, 2025, for further hearing.
The Supreme Court has considered the appeal filed by the Commissioner of Customs, Kochi, challenging the order of the Customs, Excise and Service Tax AppellateTribunal ( CESTAT ), which had ruled in favour of Lulu International Shopping Malls Pvt. Ltd. in a classification and valuation dispute concerning the import of “trampolines and tag arenas” from the Philippines.
The Tribunal, in a detailed 44-page order authored by Member (Technical) C.J.Mathew and Member (Judicial) Augustian P.A., held that the customs authorities had failed to establish that the imported goods were misclassified or undervalued.
The Tribunal found that “trampolines” were correctly classifiable under Tariff Item 9506 91 90 of the Customs Tariff Act, 1975, as equipment for general physical exercise and gymnastics, and not under 9506 99 90 as “other” equipment, as alleged by the Department.
Further, the CESTAT rejected the Revenue’s contention that installation charges paid to the foreign supplier should be added to the assessable value under Rule 10(1)(e) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
The CESTAT Bench noted that such installation and commissioning services were performed post-importation in India and were subject to GST, rendering any customs enhancement “revenue-neutral” and legally unsustainable.
The Tribunal noted the submission of Lulu’s counsel that the Department’s dependence on unverified email correspondence and commercial invoices, holding that such evidence lacked authentication under Section 138C of the Customs Act, 1962.
It further observed that the importer’s certificate of origin issued under the AIFTA had not been invalidated through proper verification procedures, and therefore, preferential duty could not be denied.
The tribunal observed that “Neither did the impugned order deploy the General Rules for Interpretation of the Tariff appended to Customs Tariff Act, 1975 for finding tariff item 9506 9990 of First Schedule to Customs Tariff Act, 1975 to be appropriate nor did our scrutiny of evidence and proposition in support of such classification generate a definitive finding to justify disturbing the declared classification. In these facts and circumstances, we find no merit in the impugned order which is set aside to allow the appeal.”
Following this order, the Customs Department filed a civil appeal before the Supreme Court, challenging the CESTAT’s findings on both valuation and classification.
The matter came up before a Bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale on October 16, 2025, where Mr. Arvind P. Datar, Senior Advocate, appeared for Lulu International, while no counsel appeared for the Department.
The Bench directed that the matter be listed again on October 31, 2025, for further hearing.
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