Customs Value Enhancement Can’t Become Final Merely Due to Importer's Consent Letter: CESTAT

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that an importer cannot be deprived of the statutory right to challenge enhancement of customs value merely because a consent letter was submitted at the time of reassessment. The bench of P.K. Choudhary (Judicial Member) and Rajeev Tandon (Technical Member) has set aside orders rejecting appeals of the importer and ruled that the customs department cannot treat such consent as complete abandonment of the right to challenge reassessment proceedings. The dispute arose from a batch of five appeals filed by an importer engaged in trading and importing polyester knitted fabrics from Hong Kong and China during May–June 2019 through ICD Dadri. According to the importer, Bills of Entry had been filed on the basis of negotiated transaction values and duties had been self-assessed in accordance with invoices and supporting documents. However, customs authorities allegedly did not permit clearance of goods on the declared value and reassessed the consignments at enhanced values. The importer argued that because delays in customs clearance were resulting in mounting demurrage and associated costs, letters had been submitted seeking provisional release of goods while paying duties on enhanced values under protest. According to the importer, despite repeated requests, authorities failed to pass speaking orders and ultimately compelled submission of consent letters accepting the revised valuation. The importer maintained that such acceptance was not voluntary and was driven by practical necessity to secure release of consignments. The Commissioner (Appeals) rejected the importer's challenge primarily on the ground that written acceptance of reassessment had already been given. The department had argued that reassessment under Section 17(4) of the Customs Act had been carried out with the importer's consent and therefore there was no requirement to issue a speaking order under Section 17(5). Before the Tribunal, the importer argued that the acceptance letters themselves did not disclose any contemporaneous import data or objective basis justifying rejection of declared values. It was submitted that mere references to contemporaneous import data without satisfying requirements under Customs Valuation Rules, 2007, including factors such as comparable quantity, quality, GSM specifications and timing of imports, could not justify reassessment. The Tribunal examined correspondence placed on record and observed that authorities had ignored letters submitted by the importer seeking clearance upon payment of enhanced duty under protest. It found that these communications demonstrated that the matter was not one of simple or unconditional acceptance of valuation enhancement. The Bench relied heavily on the Delhi High Court's judgment in Niraj Silk Mills v. Commissioner of Customs, where identical issues had been examined. The High Court had clarified that an importer's written acceptance under Section 17(5) merely relieves customs authorities of the obligation to pass a speaking order and cannot be interpreted as surrender of the statutory right to challenge reassessment. The Tribunal also referred to observations emphasizing that Rule 12 of the Customs Valuation Rules requires authorities to record and communicate reasons for doubting the truth or accuracy of declared transaction values. The judgment stressed that reasonable doubt must be based on objective material and cannot rest merely upon assumptions or unsupported reliance on data. Significantly, the Tribunal noted judicial observations that customs authorities cannot enhance declared values solely on the basis of National Import Database (NIDB) data without independent evidence and contemporaneous comparable material. Reliance only on database figures without corroborative evidence was held inconsistent with legal requirements governing customs valuation. The Tribunal held that the impugned appellate orders were unsustainable and accordingly set them aside. All five appeals were allowed with consequential relief as available under law. Case Details Case Title: M/s Jai Mata Di Trading Versus Commissioner, Customs, Noida Citation: JURISHOUR-1357-CES-2026(ALL) Case No.: Customs Appeal No.70515 of 2021 Date: 22.05.2026 Counsel For Appellant: Sunil Kumar Gupta, Advocate Counsel For Respondent: Chitra Srivastava, Authorized Representative Click Here To Read Order Read More: Customs Can’t Continue Seizure of Imported Multifunction Devices Pending Adjudication; Telangana HC Orders Conditional Provisional Release

Customs Value Enhancement Can’t Become Final Merely Due to Importer’s Consent Letter: CESTAT

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