2026-VIL-1621-CESTAT-ALH-CU
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CUSTOMS CESTAT Cases

Customs - Valuation of imported goods, Transaction value, Rejection of declared value, Enhancement on basis of acceptance letter, Compliance with Rule 12(2) of CVR 2007, Right to appeal, Speaking Order - Appellant imported Polyester Knitted Fabrics from China declaring transaction value as per commercial invoice, Proper Officer enhanced the valuation based on contemporaneous import data, Appellant initially requested clearance provisionally or finally under protest but was coerced to submit letters of consent to enhanced valuation, Commissioner (Appeals) rejected appeals holding that acceptance in writing exempts issuance of Speaking Order under Section 17(5) and forecloses right to question assessment - Whether enhancement of valuation can be sustained when proper officer failed to follow mandate of Rule 12(2) of CVR 2007 to intimate grounds in writing and whether acceptance letter bars the right to appeal against enhancement or only exempts the procedural requirement of Speaking Order - HELD - The mandate of Rule 12(2) of CVR 2007 to intimate the importer in writing the grounds for doubting the truth or accuracy of the declared value cannot be ignored or waived. The proper officer was duty bound to communicate the reasons for rejection of transaction value in writing. The letters of acceptance were obtained under pressure and not voluntarily as the Proper Officer ignored requests for provisional assessment and the letters merely state that grounds were narrated and contemporaneous import data shown without disclosing actual details - The critical distinction between the limited procedural waiver under Section 17(5) of Customs Act relating to the requirement of Speaking Order and the independent substantive right of appeal under Section 128 of Customs Act must be maintained. Acceptance letter only exempts the requirement of Speaking Order but does not bar the statutory right to appeal against the enhancement itself - The Delhi High Court in Niraj Silk Mills vs Commissioner of Customs (ICD) Patparganj has held that the right to question the correctness of the decision of the proper officer, whether with respect to formation of opinion or on merits, is protected by statute and cannot be waived. There is no estoppel in taxation matters against assertion of statutory rights - The Allahabad High Court judgment in S.S. Overseas is confined to the narrow issue of mandamus for Speaking Order and does not foreclose the statutory right of appeal - The impugned Orders-in-Appeal are set aside - Appeals are allowed
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GST & Customs updates: Sep'26
By CA Vivek Jalan

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