2016 (5) TMI 668 - AT - Customs

Whether an assessee can file an appeal against assessment made in the bills of entries, once he pays duty on the same and clears the goods, observed that acceptance of enhanced value proposed by the Department by an assessee does not preclude him from challenging the enhancement by way of appeal - Import of fabrics. Held that - provision of Section 17 does not preclude an assessee from filing an appeal against the enhancement. The issue is no more res-integra and stands settled by various decisions. It is a common case for the importers that on account of immediate requirement of imported goods or to avoid demurrage charges, such goods are cleared immediately on payment of duty on the enhanced value. Section 17 is to the effect that where such enhancement of value is accepted by the importer, there is no need for the Proper Officer to pass a reasoned order. This does not mean that the importer is precluded from filing appeal against the assessment order. The said Section would apply only in those cases where the assessee is not aggrieved by the enhancement and has accepted such enhancement in which case the Section requires that no reasoned order needs to be passed by the Proper Officer. The said section reflects upon the intention of the Legislature to avoid passing of the reasoned order and to unnecessary introduce litigation. As such, no merits found in the Revenue s stand that an importer s right to file an appeal stands curtailed down on his clearing the goods on payment of duty on the enhanced value. No reasons provided for enhancement as well as rejection of transaction value - Seems to have been done on the basis of a DRI Alert dated 09/5/2011 - Respondent contended that DRI Circular, which stands issued after considering the value of the goods on which they should be imported on the basis of detailed investigation, should have been adopted - Held that - Commissioner (Appeals) has gone into detailed examination of the provisions of Section 14 as also the Customs Valuation Determination of Value of Imported Goods Rules, 2007. As rightly observed by him, for adopting the provision of Customs Valuation Rule, the transaction value is required to be rejected as incorrect value. There being no evidence to show that the importer has paid over and above than the transaction value, to the seller of the goods, there is virtually no reasons to reject the transaction value. It is also a settled law that DRI Alerts cannot be adopted as a reason for enhancing the value. Therefore, no infirmity found in the views adopted by Commissioner (Appeals) so as to interfere in the impugned order. - Decided against the revenue

Summary

Issues:
1. Can an assessee file an appeal against assessment made in bills of entries after paying duty on the same and clearing the goods?
2. Can the Department enhance the assessable value without providing reasons for such enhancement?

Analysis:
1. The first issue revolves around the right of an importer to challenge an enhanced value in bills of entries after clearing the goods and paying duty. The Tribunal clarified that an importer can file an appeal even after accepting the enhanced value to avoid detention or demurrage charges. Section 17 of the Customs Act does not prevent an assessee from challenging the assessment order. The intention of the Legislature behind Section 17 is to streamline the process and avoid unnecessary litigation, not to restrict an importer's right to appeal. Various precedents, such as Digitech Photocopier vs. CC, Mumbai and Marque Enterprises vs. CC (Preventive), Amritsar, support the importer's right to contest the enhanced value even after clearance.

2. The second issue questions the validity of enhancing the assessable value without providing reasons for the same. The Tribunal noted that the Revenue failed to provide any justification for the enhancement and merely relied on a DRI Alert. The Commissioner (Appeals) correctly applied the Customs Valuation Rule, which mandates rejecting the transaction value only if it is incorrect. Since there was no evidence of the importer paying more than the transaction value to the seller, the Tribunal upheld the Commissioner's decision. Additionally, it was emphasized that DRI Alerts cannot serve as a valid reason for enhancing the value. The Tribunal found no fault in the Commissioner's analysis and dismissed the appeals filed by the Revenue.

In conclusion, the judgment reaffirms the importer's right to challenge enhanced values even after clearance and emphasizes the necessity of providing valid reasons for any enhancements in assessable values. The decision highlights the importance of adhering to Customs Valuation Rules and ensuring transparency in customs assessments to prevent arbitrary value enhancements without proper justification.