Declared customs value cannot be rejected on an unverified market survey; valuation enhancement and penalties fail.

Customs authorities could not reject the declared transaction value where enhancement rested solely on an unverified market survey that did not disclose the source, collector, timing, or basis of the prices recorded. The report was treated as an unsupported projection from the declared prices and lacked the reliability needed to displace the declared value. Contemporaneous import data for similar goods further weakened the valuation enhancement. Because the alleged misdeclaration depended only on this defective valuation exercise, the confiscation, redemption fine, and penalties were unsustainable and could not survive.

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Issues: Whether the customs authorities were justified in rejecting the declared value of imported goods, enhancing assessable value on the basis of an unverified market survey, and sustaining confiscation and penalties for alleged misdeclaration of value.

Analysis: The rejection of the declared value rested only on a market enquiry report that did not disclose the market from which the data was taken, who collected it, when it was collected, or whether the figures represented retail or wholesale prices. The report was found to be merely a projection from the declared prices and lacked authenticity. In the absence of reliable particulars, it could not form a valid basis for valuation. The appellants also relied on contemporaneous import of similar goods in another bill of entry, where the customs value accepted by the department broadly matched the declared prices, further weakening the basis for enhancement. Since the alleged misdeclaration was founded only on the defective valuation exercise, the confiscation and penalties could not survive.

Conclusion: The declared value could not be rejected on the basis of the impugned market survey, and the enhancement of value, confiscation, redemption fine, and penalties were unsustainable.

Ratio Decidendi: A customs valuation based solely on an unverified and unsupported market survey cannot displace the declared transaction value, and any confiscation or penalty founded only on such defective valuation must fail.

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