Case Law Details
Mahabal Impex Vs Commissioner of Customs (Appeals) (CESTAT Delhi)
In Mahabal Impex Vs Commissioner of Customs (Appeals), the Delhi CESTAT examined an appeal challenging enhancement of the assessable value of imported polyester knitted fabrics from Hong Kong. The importer had filed a Bill of Entry dated 13 November 2018 declaring the value at US $1.40 per kg. However, the assessing officer proposed enhancement of the value to US $2.30 per kg after doubting the correctness of the declared value.
The records showed that the importer accepted the enhanced value proposed by the department and paid customs duty on that basis. After payment of duty, the goods were cleared through an out-of-charge order. Subsequently, the importer filed an appeal challenging the enhancement of value.
The Commissioner (Appeals) noted that the importer had neither lodged any protest regarding payment of duty on the enhanced value nor produced any correspondence showing that the enhancement had been challenged before the assessing officer. On this basis, the Commissioner (Appeals) dismissed the appeal.
Before the Tribunal, the importer argued that the enhancement of value was contrary to the Delhi High Court judgment in Niraj Silk Mills, contending that valuation enhancement could not be based solely on NIDB data. The department, however, argued that the facts of the present case were different and that the High Court decision was not applicable.
The Tribunal observed that the importer had categorically admitted the enhanced value through a letter and paid customs duty accordingly. It further noted that the payment was not made under protest and the acceptance of enhanced value was unconditional. After payment, the goods were cleared by the importer.
The Tribunal distinguished the Delhi High Court judgment in Niraj Silk Mills by noting that, in that case, the importer had repeatedly protested, requested provisional assessment, sought expeditious clearance to avoid demurrage, and specifically indicated that duty was being paid under protest. In contrast, the present importer had not produced any evidence of protest, request for provisional assessment, or communication reserving the right to challenge the enhancement later.
The Tribunal also relied on its earlier decision in CMR Nikkei India Pvt. Ltd., where it had held that an importer who unconditionally accepts enhanced valuation cannot later challenge it in appeal. Holding that the importer had unconditionally accepted the enhanced value and paid duty without protest, the Tribunal found no merit in the appeal and dismissed it.
FULL TEXT OF THE CESTAT DELHI ORDER
M/s Mahabal Impex has filed this appeal to assail the order dated December 01, 2021 passed by the Commissioner of Customs (Appeals) by which the appeal filed by the appellant against the assessment order at enhanced value for the Bill of Entry dated November 13, 2018 has been rejected.
2. The appellant claims to have imported Polyester Knitted fabrics from its foreign supplier at Hong Kong and filed a Bill of Entry dated November 13, 2018 declaring the value of the goods as US $ 1.40 per kg. It transpires that the assessing officer proposed to enhance the value of the imported goods to US $ 2.30 per kg but the appellant accepted the enhanced value. The value was, accordingly, enhanced and the appellant paid duty on the goods on the enhanced value and out of charge order was given and the goods were cleared by the appellant.
3. Subsequently, the appellant filed an appeal challenging the enhancement of the value. During the course of hearing of the appeal, the appellant did not contest that the appellant had accepted the enhanced value of US $ 2.30 per kg. The Commissioner (Appeals) also noted that the appellant had not lodged any protest with the department regarding payment of the enhanced value nor the appellant had brought on record any correspondence to show that the appellant had challenged the enhancement of value with the assessing officer. The Commissioner (Appeals), therefore, dismissed the appeal.
4. Shri Sagar Rohatgi, learned counsel appearing for the appellant submitted that the view taken by the Commissioner (Appeals) is contrary to the decision of the Delhi High Court rendered in Niraj Silk Mills Commissioner of Customs (ICD), Patparganj for the reason that the enhancement of the value could not be solely on the basis of NIDB data.
5. Shri Mukesh Kumar Shukla, learned authorized representative appearing for the department, however, submitted that the decision of the Delhi High Court in Niraj Silk Mills will not apply to the facts of the present case.
6. The submissions advanced by the learned counsel appearing for the appellant and the learned authorized representative appearing for the department have been considered.
7. It clearly transpires from the records that though the appellant had submitted the Bill of Entry dated November 13, 2018 declaring the value of the goods as US$ 1.40 per kg, but as the proper officer had reason to doubt the correctness of the value declared by the appellant, he proposed to enhance the value to US$ 2.30 per kg. and when this was brought to the notice of the appellant, he submitted a letter categorically admitting the enhanced value and also paid the customs duty. The customs duty was not paid by the appellant under protest nor was the letter a conditional letter. Out of charge was given by the officer and the appellant cleared the goods.
8. It is thereafter that the appellant filed an appeal before the Commissioner (Appeals) contending that the enhancement was not proper.
9. The Delhi High Court in Niraj Silk Mills noted that the importer therein had registered protests on more than one occasion and had also sought expeditious clearance of the goods subject to an exercise of provisional reassessment being undertaken. The Delhi High Court also noticed that the importer had submitted a letter to clear the goods on provisional basis to avoid financial burden and demurrages and it is only after all these requests fell on deaf ears that the appellant submitted a letter consenting to the re-determination of the value in accordance with what was proposed by the proper officer. The Delhi High Court also noticed that there were communications addressed to the proper officer in which the importer while consenting to the proposed re-assessment had also conveyed readiness to pay the customs duty at the enhanced value as suggested ‘under protest’. It is, in such circumstances, that the Delhi High Court observed that it was not a case where the concession was either unqualified or without reservation of a right to question the assessment made by the proper officer.
10. In the present case, nothing has been brought on record by the appellant to show that either it had submitted letters for provisional assessment or had indicated that the goods should be cleared expeditiously to avoid accruing liability of demurrages and other charges. 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.
11. A Division Bench of this Tribunal in Commissioner of Customs (Preventive), Jaipur CMR Nikkei India Pvt. Ltd. has considered this aspect and has held that it is not open to the importer to challenge the enhanced value after unconditionally accepting the enhanced value.
12. There is, therefore, no merit in this appeal. It is, accordingly, dismissed.
(Order pronounced on 19.05.2026)
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