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TMI Blog2025 (2) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... oper officer is required to call upon the importer or the exporter, as the case may be, to produce further document or information based whereupon the correct duty leviable on the imported/exported goods should be ascertained [Section 17(3)]. In addition to enquiry, as required under Rule 12 of Valuation Rules the enquiry prescribed under Section 17(4) of the Customs Act is required to be conducted by the proper officer to arrive at the reassessed value. It is seen from a perusal of Section 17(4) of the Customs Act that the proper officer can re-assess the duty leviable, after verification, examination or testing of the goods or otherwise if it is found that the self-assessment was not done correctly - where the proper officer is not satisfied and has reasonable doubt about the truth or accuracy of the value so declared. It is deemed that the transactional value of such imported goods cannot be determined under the provision of sub-rule (1) of Rule 3 of the 2007 Rules. Clause (iii) of Explanation to Rule 12 states that the proper officer can on "certain reasons" raise doubts about the truth or accuracy of declared value. The transaction value declared by the importer should form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementioned Bills of Entries for import of Mix lot of 100% polyester knitted fabrics from china at ICD, Tughlakabad. The assessing authority had enhanced the value as was declared by the appellant in those bills of entries. The appellant had paid the differential duty of Rs. 22,555.99/-, 23,051.53 and 18,525.06 respectively. However, being aggrieved of the enhancement of value, present three separate appeals (per bill of entry) were filed. Pursuant thereto the common order-in-appeal as mentioned above has been passed holding as follows: "I note that the duty at enhanced value was paid without any protest. When value was enhanced, the appellant neither sought speaking orders nor did they lodge any protest. This clearly indicates that enhanced value was accepted. Filing of appeal after having accepted enhanced value is nothing but an afterthought. It is now a settled position of law that once enhanced value has been accepted without any protest, there is no ground to challenge it later on. I rely upon following case law in this regard- (i) M/s Hanuman Prasad and Sons [2020 (12) TMI 1092 CESTAT-Delhi] (ii) M/s Manvi Exim Pvt. Ltd. [2022 (7) TMI 466 CESTAT Delhi] (iii) M/s S.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of Revenue. I find the moot adjudication for the present appeals is : Whether the Revenue has rightly re-assessed and enhanced the value of the imported goods without passing any speaking order but based on the fact that the differential duty has voluntarily been paid by the appellant? 8. To adjudicate the question so framed, it is foremost essential to understand the scheme of the statute vis-à-vis valuation, assessment of value, rejection thereof and the reassessment thereafter: Valuation: 9. The subject of valuation of goods is firstly dealt with in Section 14 of the Customs Act, 1962. The provision makes it clear that the value of imported and exported goods is recognized to be the transaction value which expression is explained to mean the price actually paid or payable for those goods when sold for import to India or for export from India for delivery at the time and place of importation/exportation. According to Section 14(1) of the Act the assessment of duty is to be made on the value of the goods. The value may be fixed by the Central Government under Section 14(2). Where the value is not so fixed, the value has to be determined under Section 14(1). The val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r initially follow a process of self-assessment of declaration of the transaction value [Section 17(1)]. The proper office is entitled to examine veracity of self declaration that is made [Section 17(2)]. For the purpose, the proper officer is required to call upon the importer or the exporter, as the case may be, to produce further document or information based whereupon the correct duty leviable on the imported/exported goods should be ascertained [Section 17(3)]. Thereafter comes a situation when the proper officer seek clarification/gets examination/testing of goods or otherwise gets doubtful with respect to correctness of the declared transaction value and thus undertakes an exercise to reassess the duty eligible on such goods [Section 17(4)]. If on the said verification, examination/testing of the goods, as done under Section 17(4) of the Act, the re-assessed value arrived at is different/contrary to the self-assessed value/the transaction value declared by the importer/exporter in the bill of entry, a speaking order to that effect has to be passed in all other cases, except in the case where the importer/exporter confirms his acceptance of the "said re-assessment in writing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in sub-clauses (a) to (f) in clause (iii) of the Explanation. (g) The proper officer, on a request made by the importer, has to furnish and intimate to the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to the imported goods. Thus, the proper officer has to record reasons in writing which have to be communicated when requested. (h) The importer has to be given opportunity of hearing before the proper officer finally decides the transactional value in terms of Rules 4 to 9 of the 2007 Rules." 15. The stage at Sr. No. (f) above is the stage for invoking Section 17(4) of the Customs Act and the stage mentioned at Sr. No. (h) above is the stage where after the proper officer re-assessed the duty leviable on the goods in terms of Section 17(4) of the Act itself. Both Section 17 of Customs Act and Rule 12 of Valuation Rules mandatorily require the reasons in support of the "reason to doubt" the transaction value with the proper officer. Otherwise it would result in proper officer not even documenting the grounds on which it came to doubt the declared value at first instance thereby creating a situation of arbitrariness. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as required under Rule 12 of Valuation Rules (as discussed above) the enquiry prescribed under Section 17(4) of the Customs Act is required to be conducted by the proper officer to arrive at the reassessed value. It is seen from a perusal of Section 17(4) of the Customs Act that the proper officer can re-assess the duty leviable, after verification, examination or testing of the goods or otherwise if it is found that the self-assessment was not done correctly. Sub-section (5) of Section 17 provides that where any re-assessment done under sub-section [(4) of section 1] is contrary to the self-assessment done by the importer, the proper officer shall pass a speaking order on the re-assessment, except in a case where the importer confirms his acceptance of the said reassessment in writing. Method of valuation is regulated by Rule 3 of Valuation Rules however it commences using the phrase subject to Rule 12", which as noticed above enjoys primacy and pivotal position, applies where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods. It envisages a two-step verification and examination exercise. At the first instance, the proper o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision reads as follows: "(5) where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be." Perusal makes it clear that the acceptance of importer/exporter under this provision is: (I) shall be with respect to re-assessment as done under sub-section 4 of Section 17 of the Act in case re-assessment value is contrary to the self-assessment done by the importer/exporter (II) shall be in writing - As discussed above the re-assessment under Section 17(4) is the outcome of the verification and/or examination/testing or the goods or otherwise. it has also been discussed that the exercise which is liable to be undertaken by the proper officer under Section 17(4) must also be appreciated in the backdrop of Rule 12 of the Valuation Rules. The Hon'ble Apex Court in the case of ACC (Import), TKD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sole ground for confirmation, in the said case, was also the admission of the authorized representative of the appellant in his statement recorded by the Customs officers where he accepted re-assessed value and offer to pay the differential along with pay applicable fine and penalty. He also opted for not being served with show cause notice nor for the opportunity of personal hearing with the request to dispose of the case at the earliest. However, it was held that since the appellant was trying to avoid delay and demurrage charges that he opted to pay differential amount demanded by them. Resultantly, the voluntary payment cannot be called as admission of the appellant towards alleged mis-declaration for value. Also for the reason that the department has not followed the statutory procedure nor there was any mis-declaration of quantity as alleged. The mere acceptance of the re-assessed value and payment thereof will not be sufficient to confirm the allegations of under valuation. The burden still rests on department to prove the said allegations. In case the burden is not discharged the statement of the appellant or the payment of differential duty being made by him will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the proper officer. However, as brought to notice the said order has been set aside by Hon'ble High Court Delhi vide the judgment pronounced in bunch of Customs appeals on 27.11.2024. The Hon'ble Court has held as follows: "73. A combined reading of Section 17 alongside Rule 12 would establish that the enquiry by the proper officer is essentially two-tiered. The first stage comprises of the proper officer forming the opinion that the declared value is liable to be reviewed, basis reasonable doubt being harboured with respect to its truthfulness or accuracy. Upon arriving at that preliminary conclusion, the proper officer is obliged to convey their opinion to the importer and elicit further information and documents to aid and assist it in the adjudicatory process. It is at this stage that the importer is entitled to call upon the proper officer to provide the grounds for doubting the declared value in writing so as to enable it to respond. The obligation to supply the reasons and to provide a reasonable opportunity of representation to the importer is clearly mandatory in light of the language employed by Rule 12(2) and which uses the phrase "...before taking a final decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it would also permanently deprive the importer of the right to question and challenge that decision." 23. In addition to the above discussion the burden of proof about incorrect valuation lies on the department a was held by Hon'ble Apex Court in the case of Commissioner of Customs Vs. South India Television Pvt. Ltd. - (2007) 6 SCC 373. It has also been held in number of decisions that NIDB data cannot be made the basis for enhancement of value. This Tribunal also in the case of Commissioner of Customs, New Delhi Vs. North International as reported at 2013 (289) ELT 305 (Tri.-Del.) while relying upon the decision of Hon'ble Apex Court in Eicher Tractors Ltd. (supra) has held that transaction value cannot be rejected without clear and cogent evidence produced by the department with regard to quality, import of origin and place and time of import instead of being rejected on the basis of NIDB data. NIDB data can be a guideline and incorporatory for the assessing officer but it cannot be a substitute for the assessable value which has to be invariably arrived at applying Section 14 & 17 of the Customs Act read with Rule 12 of the Valuation Rules, 2007 as it was held by this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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