No Appeal against Customs Duty Demanded below threshold limit prescribed by CBIC: CESTAT [Read Order]

The Chandigarh bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has held that the department cannot challenge the commissioner's order if customs duty demand is below the threshold limit prescribed by the Central Board of Indirect Taxes and Customs ( CBIC ).

Sedna Impex India Pvt Ltd, the respondent-importer had imported different types of “fabrics” and filed three Bills of Entry at ICD Ballabhgarh on a self-assessment basis. The declared value of the goods in these Bills of Entry was found inadequate by the Assessing Officer as compared to the contemporaneous data on the import of similar goods.

The declared value of the goods was rejected in terms of Rule 12 of the Customs Valuation Rules 2007 (CVR, 2007), and the assessable value was enhanced in view of contemporaneous import data for similar goods. The importer filed an appeal against the said assessment of Bills of Entry with enhanced value before the Commissioner (Appeals), who remanded the matter back, directing the Assessing Authority to pass a speaking order under Section 17(5) of the Customs Act, 1962.

The Deputy Commissioner of Customs passed a speaking order specifying the reasons for rejecting the self-declared value under Rule 12 of the CVR, 2007 and re-determining the assessable value on the basis of contemporary import under Rule 5 of the CVR, 2007, specifying as to why the provisions of Rule 4 of the CVR, 2007 were not applicable and why re-determination was done under Rule 5.

The importer again filed the appeal before the Commissioner (Appeals), which was set aside for the re-assessment of goods at enhanced value and consequently allowed the appeal filed by the importer.

The department filed the appeal challenging the order mainly on the ground that the Commissioner (Appeals) did not appreciate that the importer in the case, after seeing the contemporaneous import data (prevailing during that period), had agreed to re-determination of value in their reply to the query in the EDI system and voluntarily forfeited their right to show cause notice and the opportunity of personal hearing.

The respondent contended that the appeal is not maintainable in view of the directions, instructions, and circulars issued by the Ministry or Board prohibiting the filing of appeals below the stipulated monetary threshold limit of Rs. 50 lakhs.

The Ministry of Finance clearly stated in its instructions dated November 2, 2023, that it does not want to pursue any litigation before the CESTAT where an appeal involves duty of less than 50 lakhs. The delegatee or agent of the Ministry of Finance cannot seek to file an appeal in defiance of and contrary to the instructions of its master, i.e., the Ministry of Finance.

The two member bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the amount of duty involved in the appeal is below the threshold limit prescribed in the circular dated November 2, 2023, issued by the CBIC. The circular provides that if the duty amount involved is less than Rs. 50 lakhs, then no appeal shall be filed before the CESTAT, and if already filed, it will be withdrawn by the department.

While dismissing the appeal, the tribunal held that the appeal filed by the department is not maintainable as per the instructions dated November 2, 2023, issued by the Board.

To Read the full text of the Order CLICK HERE

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