Importers can challenge enhanced customs values despite written consent, CESTAT rules in five appeals

M/s Shiv Trading Company imported assorted polyester knitted fabrics from China under five Bills of Entry.

Customs rejected the declared transaction values and enhanced them by reference to contemporaneous import data.

The importer alleged that it accepted the enhanced values under pressure to secure clearance, and that the Department had not provided the underlying data or issued speaking orders.

The Commissioner (Appeals) rejected the importer’s appeals, reasoning that its written acceptance dispensed with the requirement to issue speaking orders under Section 17(5) of the Customs Act, 1962.

The importer appealed to the Tribunal.

Whether the importer’s written acceptance of reassessed values prevented it from challenging the reassessment in appeal

Whether the declared transaction value could be rejected and enhanced without complying with Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and without cogent support for the revised value

Section 14 of the Customs Act, 1962, read with Rule 3 of the 2007 Valuation Rules, requires customs valuation to be based on the transaction value, subject to the statutory valuation rules.

Under Rule 12(2), where the proper officer has grounds to doubt the truth or accuracy of the declared value, the officer must communicate those grounds to the importer; after rejecting the transaction value, the officer must determine value by applying the Rules sequentially.

Section 17(5) permits the proper officer to dispense with a speaking order where the importer accepts the reassessment in writing, but that concession does not, by itself, extinguish the importer’s statutory right to challenge the reassessment.

The Tribunal applied Century Metal Recycling Pvt. Ltd. v. Union of India, 2019 (367) E.L.T. 3 (S.C.), on the mandatory nature of Rule 12(2), and Niraj Silk Mills v. Commissioner of Customs (ICD), Patparganj, CUSAA 26/2022 (Delhi High Court, 27 November 2024), on the importer’s right to contest reassessment and the insufficiency of NIDB data alone to justify a valuation addition.

The Commissioner (Appeals) treated the acceptance letters as conclusive, without addressing whether the Department had complied with Rule 12(2) or properly established the enhanced values.

The Tribunal found that, although the letters stated that contemporaneous import details had been shown, they did not identify those details; the gap between the statements in the letters and the supporting material had not been bridged by the Revenue.

Applying Century Metal Recycling and Niraj Silk Mills, the Tribunal held that acceptance of reassessment—and waiver of a speaking order under Section 17(5)—does not bar a subsequent statutory challenge.

It also concluded that reliance on NIDB or contemporaneous data without adequate particulars and supporting material could not, by itself, sustain the enhancement.

It set aside the common Order-in-Appeal and allowed all five appeals, with consequential relief, if any, as per law.