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Issues: (i) Whether the declared import value of blank traveller cheque forms was liable to be rejected and value enhanced on the basis of comparable imports; (ii) whether penalty was sustainable.
Issue (i): Whether the declared import value of blank traveller cheque forms was liable to be rejected and value enhanced on the basis of comparable imports.
Analysis: The importer and supplier belonged to the same group, the goods were supplied free of cost, and the invoice reflected only cost of production. In these circumstances, the declared figure could not be treated as the ordinary sale price at the time and place of importation. The valuation adopted on the basis of similar imports by another company was accepted under Rule 8 of the Customs Valuation Rules, 1988.
Conclusion: The enhancement of assessable value and consequential duty demand were upheld against the assessee.
Issue (ii): Whether penalty was sustainable.
Analysis: The record did not disclose justification for penal action, though the assessment was sustained.
Conclusion: The penalty was set aside in favour of the assessee.
Final Conclusion: The appeal succeeded only to the extent of deletion of penalty, while the reassessment of value and duty demand was maintained.
Ratio Decidendi: Where related-party supply and free-of-cost import make the declared figure non-representative of ordinary international trade value, valuation may be determined by reference to comparable imports, but penalty requires independent justification.
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