Importer Cannot Contest Customs Reassessment After Accepting Enhanced Value: CESTAT Delhi

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has dismissed an importer's challenge to enhancement of customs value after finding that it had accepted the revised valuation, paid duty, and cleared the goods without protest.

A bench of President Justice Dilip Gupta and Technical Member P.V. Subba Rao distinguished the Delhi High Court's ruling in Niraj Silk Mills, where the importer had consistently protested the reassessment and sought provisional clearance.

“It clearly transpires from the records that the appellant unconditionally accepted the enhanced value and paid the duty and cleared the goods and it is later that a challenge was made to the enhancement of the value in the appeal.”

Mahabal Impex had imported polyester knitted fabrics from Hong Kong and filed a Bill of Entry dated November 13, 2018, declaring the value at US $1.40 per kg. The proper officer, however, proposed enhancement of the value to US $2.30 per kg, which the importer accepted.

The importer thereafter paid customs duty on the enhanced value, following which an out-of-charge order was issued and the goods were cleared.

Subsequently, the appellant challenged the enhancement before the Commissioner (Appeals), which rejected the plea after noting that no protest had been lodged and no correspondence had been placed on record to show that the enhancement had been disputed.

Before the tribunal, the appellant argued that enhancement based solely on NIDB data was impermissible in view of the Delhi High Court's decision in Niraj Silk Mills v. Commissioner of Customs.

The tribunal noted that in Niraj Silk Mills, the importer had consistently opposed the value enhancement, sought provisional assessment, and agreed to pay the higher duty only under protest to avoid demurrage and financial strain.

Mahabal Impex, by contrast, did none of this before accepting the enhanced value and clearing the goods.

Citing its earlier ruling in Commissioner of Customs (Preventive), Jaipur v. CMR Nikkei India Pvt. Ltd., the tribunal said an importer cannot later challenge an enhancement that was accepted without protest.

The appeal was accordingly dismissed.