Supreme Court Dismisses Customs' Appeal Seeking Rs 93 Lakh Duty On Lulu Malls' Imported Trampolines

The Supreme Court recently (October 31) dismissed an appeal filed by the Customs Department challenging the classification and valuation of imported amusement equipment, including trampolines, by Lulu International Shopping Malls Pvt Ltd.

A bench of Justices Pankaj Mittal and Prasanna B Varale held that there was no error in the classification of the trampolines and other equipment under the category of gymnastics equipment.

The bench observed, “we do not find any infirmity in the classification of the Trampoline and other items, as has been done by the Central Excise Tribunal('CESTAT').Accordingly, the civil appeal stands dismissed.”

The dispute arose when Lulu Malls imported trampolines and other amusement equipment from the Philippines for its 'Funtura' amusement facility in Trivandrum. The company classified the goods under a category meant for “articles and equipment for general physical gymnastics or athletics,” and claimed exemption under ASEAN-India free trade agreement.

However, Customs authorities in Kochi disagreed and said the goods should fall under the category covering “other" amusement and entertainment equipment. Customs also wanted to include €74,100 paid for installation services in the value for customs duty. Accordingly, it demanded Rs 93.24 lakh in additional duties from Lulu Malls.

Lulu Malls argued that installation was optional, not a condition of sale, and the company had already paid domestic GST on it.

In an order passed on June 2, CESTAT Bengaluru agreed with Lulu Mall. The tribunal said the installation payment could not be added to the customs value and noted, “...rule 10 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 needs to be strictly construed with no scope for flexing in assessment at time of import that may have the effect of overlap in tax liability and, consequently, that 'condition of sale' must not be inferred but determined to exist both in the contractual arrangement and by the factual matrix peculiar to each import.”

On classification, the tribunal emphasized that trampolines are undeniably equipment used in gymnastics and sports, and the burden of proof lies with Customs to prove otherwise. It found no reason to move the goods to the category claimed by authorities.

In appeal, the apex court too agreed with CESTAT and dismissed the appeal.

Case Title: COMMISSIONER OF CUSTOMS V LULU INTERNATIONAL SHOPPLING MALLS PVT. LTD

Case Number: Diary No. 47976/2025

For Appellant: Additional Solicitor General N Venkataraman with advocates Gurmeet Singh Makker, Annirudh Sharma Neelakshi Bhaduria, Shantanu Verma and Pallav Mongia

For Respondent: Advocate Radha Shyam Jena

Click here to read/download order