Department appeal dismissed for falling below Rs.50 lakh duty threshold per CBIC circular

The CESTAT Chandigarh dismissed a departmental appeal as non-maintainable due to monetary threshold limits. The CBIC circular dated 02.11.2023 prescribed that appeals involving duty amounts below Rs.50 lakhs should not be filed before CESTAT, and if already filed, must be withdrawn. Since the duty amount in this case fell below the prescribed threshold, the appeal was dismissed following the Board's instructions. The respondent's counsel raised no objection to this disposal method.

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Issues Involved:
1. Validity of assessment based on enhanced value.
2. Requirement of a Speaking Order under Section 17(5) of the Customs Act, 1962.
3. Onus of proof regarding declared value.
4. Applicability of monetary limits for filing appeals as per CBIC instructions.

Issue-wise Detailed Analysis:

1. Validity of Assessment Based on Enhanced Value:
The primary issue in the appeal was the validity of the assessment made by the department on the enhanced value of imported "Dry Dates" as per the acceptance/admission by the importer. The declared value of USD 0.25/Kg was found inadequate by the Assessing Officer when compared to contemporaneous import data. The importer, in response to a query, requested the Assessing Officer to enhance the value to USD 0.35/Kg, which was based on their previous Bill of Entry. The Assessing Officer enhanced the value accordingly, and the importer paid the duty without protest at that stage. The Commissioner (Appeals) later set aside this assessment, noting that the reasons for rejecting the declared value were not provided, and the enhanced value was accepted by the importer under duress to avoid detention and demurrage charges.

2. Requirement of a Speaking Order under Section 17(5) of the Customs Act, 1962:
The Commissioner (Appeals) observed that no Speaking Order was passed as required under Section 17(5) of the Customs Act, 1962, which mandates that reasons for rejecting a declared value must be documented. The importer had requested a Speaking Order after paying the duty under protest, but no such order was issued. This procedural lapse was a significant ground for setting aside the assessment.

3. Onus of Proof Regarding Declared Value:
The Appellate Authority emphasized that it is a judicially settled principle that the onus to prove that the declared price does not reflect the true transaction value lies with the department. The declared value can be rejected only on the basis of reasonable and cogent evidence. The department failed to provide details of contemporaneous imports or any substantial evidence to justify the enhanced value, thus failing to discharge its burden of proof.

4. Applicability of Monetary Limits for Filing Appeals as per CBIC Instructions:
The respondent raised a preliminary objection regarding the maintainability of the appeal, citing the CBIC's instructions that prohibit filing appeals below a stipulated monetary threshold of Rs. 50 lakhs. The duty differential in question was Rs. 22,53,057/-, which is below the threshold. The CBIC's instructions dated 02.11.2023, issued under Section 131BA of the Customs Act, 1962, prescribe that no appeal shall be filed before the CESTAT for amounts below Rs. 50 lakhs. The Tribunal noted that the instructions are binding on the department and have been consistently upheld by various judicial pronouncements, including the Supreme Court and High Courts, to reduce litigation involving meager amounts of revenue.

Conclusion:
The Tribunal dismissed the appeal filed by the department, holding that it was not maintainable due to the monetary threshold prescribed by the CBIC's instructions. The Tribunal also noted the procedural lapses in the assessment process, including the lack of a Speaking Order and the failure of the department to provide substantial evidence to reject the declared value. The appeal was dismissed, leaving the question of law open.

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