CESTAT New Delhi- The reassessment was held to be invalid and legally unsustainable

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Dated: 03.05.2025

CESTAT New Delhi- The reassessment was held to be invalid and legally unsustainable

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, ruled in favour of M/s Trina Steelcarb Pvt. Ltd., setting aside a reassessment order that enhanced the assessable value of imported goods without issuing a speaking order as mandated under Section 17(5) of the Customs Act, 1962.

CESTAT’s Key Observations:

1. Violation of Section 17(5):

The Tribunal found that the assessing officer failed to issue a speaking order despite the reassessment being contrary to the importer’s declared self-assessment and without written acceptance. Section 17(5) mandates issuance of a speaking order within 15 days in such cases.

2. Illegality of Value Loading:

The Tribunal held that:

The so-called “loading” of value is not recognised under Section 14 of the Customs Act or Customs Valuation Rules, 2007.
If transaction value is to be rejected, it must be done following Rule 12 of the Valuation Rules.
Any reassessment must follow the sequential application of Rules 4 to 9, which was not done.

3. Improper Reliance on Case Law:

The Commissioner (Appeals) relied on the Hanuman Prasad & Sons case, where reassessment was explicitly accepted in writing. In Trina Steelcarb’s case, no such written acceptance existed. Thus, the precedent was inapplicable.

Final Verdict:

The reassessment was held to be without legal authority.
The failure to issue a speaking order constituted a procedural illegality.
The Commissioner (Appeals)’s order was set aside.
Consequential relief was granted to the appellant.

Implications:

This judgment reinforces the statutory safeguards available to importers and underscores the importance of procedural compliance under Section 17(5). It serves as a clear warning against arbitrary customs valuation and misuse of power by assessing authorities.

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Source: CESTAT NEW Delhi

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