2026-VIL-1702-CESTAT-ALH-CU
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CUSTOMS CESTAT Cases

Customs - Enhancement of declared value on written acceptance by importer - Right to appeal and requirement of speaking order under Section 17(5) of the Customs Act, 1962 – Appellant accepted in writing the enhancement of value proposed by the department after its requests for clearance on provisional basis were not acted upon and it was asked to submit letters of consent, and the Commissioner (Appeals) rejected the appeals holding that acceptance in writing dispensed with a speaking order and bound the Appellant - Whether written acceptance of the enhanced value precludes the importer from challenging the enhancement in appeal - HELD - Following the Delhi High Court, Section 17(5) speaks of the concession only with reference to reassessment under Section 17(4) and relieves the proper officer of the obligation to pass a speaking order, so the waiver is at best confined to the speaking order. Rule 12(2) of the Customs Valuation Rules, 2007 contemplates no waiver, and the concession made in respect of the opinion of the proper officer cannot detract from or deprive the importer of the right to question the decision in accordance with law, as the right to question the correctness of the decision, whether on formation of opinion or on merits, is protected by statute and is not abandoned - The letters of acceptance also did not mention the details of the alleged contemporaneous import data and cannot be taken on their face value - The acceptance letters do not preclude the Appellant from challenging the enhancement - The Orders-in-Appeal are set aside and the appeals are allowed - Rejection of declared transaction value - Rule 12 of the Customs Valuation Rules, 2007 and reliance on import data - Department rejected the declared value on comparison with contemporaneous import data, without intimating in writing the grounds for doubting its truth or accuracy, and re-determined the value - Whether the declared transaction value can be rejected and enhanced without following Section 14 of the Customs Act read with Rule 12 of the Valuation Rules - HELD - The Supreme Court in Century Metal Recycling case has held that the mandate of Rule 12(2) to intimate the importer in writing the grounds for doubting the truth or accuracy of the declared value cannot be ignored or waived - The formation of opinion regarding reasonable doubt and communication of the grounds to the importer is mandatory, any subterfuge to bypass the statutory mandate being unacceptable – Further, the Delhi High Court has held that a valuation addition based solely on import data is unwarranted and any reassessment must be shored up by independent and cogent evidence, as mere reliance on external data without corroborative evidence or clear justification fails the tests under the Valuation Rules, and a deviation from declared values must be founded on tangible and justiciable material - The Commissioner (Appeals) failed to take into account the ratio of the Supreme Court's judgment in entirety - The impugned orders are set aside and the appeals are allowed.
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