2026-VIL-1579-CESTAT-ALH-CU
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CUSTOMS CESTAT Cases

Customs – Valuation – Acceptance Letters and Right to Challenge Reassessment – Appellant imported polyester knitted fabrics from China and declared transaction value in accordance with commercial invoices. Customs authorities questioned the declared value and sought to enhance it based on National Import Database data showing contemporaneous imports at higher values. Appellant made written requests for clearance on payment of duty at enhanced value under protest to avoid demurrage and detention costs. Due to commercial pressures, Appellant submitted letters of acceptance agreeing to the enhancement and waiving the requirement of show cause notice or speaking order. Assessing Officer refused to pass a speaking order relying solely on the acceptance letter. All appeals filed by Appellant were rejected by Commissioner (Appeals) holding that since Appellant accepted enhancement in writing, no speaking order was required and the Appellant was barred from challenging the assessment – Whether an acceptance letter given at the threshold of clearance, essentially under commercial compulsion to avoid detention and demurrage charges, operates as an unconditional waiver of the statutory right to appeal against the valuation enhancement itself, or whether it only waives the procedural requirement of a speaking order under Section 17(5) of the Customs Act – HELD – Acceptance letters given under commercial pressure do not foreclose the statutory right to challenge the reassessment and valuation enhancement. The waiver of speaking order under Section 17(5) of the Customs Act is a limited procedural concession and cannot be construed as abandonment of the independent substantive right of appeal conferred by Section 128 of the Customs Act, 1962. There is no estoppel in taxation matters and consent given by an assessee cannot take away rights otherwise available under law. The mandate of Rule 12(2) of the Customs Valuation Rules, 2007 to communicate to the importer in writing the grounds for doubting the truth or accuracy of the declared value is mandatory and cannot be ignored or waived. The mere mention in an acceptance letter that contemporaneous import data has been shown to the Appellant without disclosing the actual comparable data including quantity, quality, and time of import does not constitute valid fulfillment of the statutory requirement. The formation of opinion regarding reasonable doubt and communication of the said grounds to the importer in writing is mandatory and subterfuge to bypass this mandate is unacceptable. The principles established by the Hon'ble Delhi High Court in Niraj Silk Mills v. Commissioner of Customs (ICD) Patparganj, squarely cover the facts of the present appeals and hold that the right to question the correctness of the decision of the proper officer is protected by statute and cannot be abandoned through acceptance letters. The reliance placed by the Department on M/s S.S. Overseas v. Union of India is misplaced as that decision addresses only the narrow question of whether a writ of mandamus lies for issuance of a speaking order and does not adjudicate upon the independent statutory right of appeal against the reassessment itself – The impugned Orders-In-Appeal are unsustainable in law and are set aside and the appeals are allowed with consequential relief as per law.
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