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Written Acceptance of Enhanced Value Doesn't Bar Appeal, Holds for
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, has delivered a significant ruling clarifying that an importer's written acceptance of an enhanced customs value does not extinguish the statutory right to challenge that assessment in appeal. A bench comprising Judicial Member P.K. Choudhary and Technical Member K. Anpazhakan set aside the orders of the Commissioner (Appeals) that had rejected 's appeals solely on the ground that the importer had consented to the enhanced valuation.
The Dispute: A Tale of Twenty-Six Consignments
, a Delhi-based importer, brought in 26 consignments of polyester knitted fabrics from China between . It declared a transaction value of USD 1.35 per kg, supported by the foreign supplier's commercial invoices. Customs officers examined the goods and found no discrepancy in description, quantity, or nature. Yet, the department decided to enhance the assessable value.
The importer maintained that it repeatedly sought provisional or final clearance on payment of duty on the enhanced value "" to avoid mounting . According to the company, these requests were ignored, and it was eventually "coerced" into submitting letters consenting to the enhanced value. After clearance, sought speaking orders from the assessing officer, but none were issued. It then appealed the assessments.
The Commissioner's View: Consent Closes the Door
The Commissioner (Appeals) rejected the appeals, holding that since the importer had accepted the enhanced value in writing and explicitly stated it did not require a show-cause notice or , the reassessment was final and binding. The department argued that , which mandates a , is waived once the importer confirms acceptance in writing. It also relied on the 's decision in and the 's dismissal of the SLP in that case.
The Tribunal's Reasoning: of ≠ of Right to Appeal
CESTAT drew a sharp distinction between two separate legal entitlements: the limited procedural of a under Section 17(5), and the substantive, independent right of appeal under .
"This conflates two distinct things—the limited procedural of a and the independent, substantive right of appeal conferred by Section 128 of the Act."
The tribunal noted that the acceptance letters did not disclose the actual details of the
allegedly used to enhance the value. It found that the letters
"merely recite that
was 'gone through and understood', without disclosing the actual comparable data (quantity, quality, contemporaneity),"
and therefore could not be read as an unconditional surrender of the right to contest valuation.
Crucially, CESTAT relied on the 's authoritative ruling in Niraj Silk Mills v. Commissioner of Customs (ICD), Patparganj (CUSAA 26/2022, decided ). In that case, the High Court held that a concession regarding the does not detract from or deprive the importer of the right to question the proper officer's decision in accordance with law. The explicitly ruled:
"The right to question the correctness of the decision of the proper officer, be it with respect to the formation of opinion or even on merits, is one which is protected by statute."
The tribunal also invoked the 's landmark judgment in Century Metal Recycling Pvt. Ltd. v. Union of India (2019), which held that the mandate of —requiring the proper officer to communicate in writing the grounds for doubting the declared value—cannot be ignored or waived.
Distinguishing S.S. Overseas
The department's heavy reliance on S.S. Overseas was rejected. CESTAT observed that the 's judgment in that case answered only the narrow question of whether a writ of mandamus lies for issuance of a after acceptance. It did not adjudicate or foreclose the independent statutory right of appeal. The tribunal noted that a coordinate bench had already distinguished S.S. Overseas in .
No Estoppel Against Statute
Reinforcing its conclusion, the bench held that
"there can be no
,"
and that an assessee's consent or acquiescence cannot defeat rights conferred by law. It cited the
's observations in
and
.
The Final Order
CESTAT set aside the impugned Orders-in-Appeal and allowed all 26 appeals filed by , with consequential relief, if any, in accordance with law. The decision underscores that even where an importer has consented to a valuation enhancement to secure clearance, the doors of remain firmly open. This ruling is likely to provide significant relief to importers who have been pressured into accepting enhanced valuations under the threat of demurrage and detention.
