Transaction value and import exemption cannot be rejected on a proforma invoice or implied actual-user requirement.

A proforma invoice, being only an offer price, cannot by itself displace declared transaction value or serve as contemporaneous import price without material showing the invoice value is unreliable. The higher revaluation adopted below was therefore unsustainable. The exemption under Notification No. 45/94-Cus. for specified leather-industry goods could not be denied merely because the importer was a trader, since the notification did not impose an actual-user condition for the goods concerned. The exclusion of exemption on an implied actual-user requirement was unjustified, and the impugned order was held unsustainable with consequential relief to the importer.

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Issues: (i) whether the imported goods could be revalued on the basis of a proforma invoice treated as a contemporaneous import price; and (ii) whether exemption under Notification No. 45/94-Cus. was unavailable because the importer was a trader and not an actual user in the leather industry.

Issue (i): whether the imported goods could be revalued on the basis of a proforma invoice treated as a contemporaneous import price.

Analysis: A proforma invoice is only an offer price and does not evidence an actual completed transaction. In the absence of material casting doubt on the invoice value or showing that the declared price was not the price at which the goods were actually sold, the transaction value could not be discarded. The higher value adopted by the lower authorities, said to be based on contemporaneous imports, was therefore unsupported.

Conclusion: The revaluation was not sustainable.

Issue (ii): whether exemption under Notification No. 45/94-Cus. was unavailable because the importer was a trader and not an actual user in the leather industry.

Analysis: The notification exempted specified goods, including insoles or midsoles and sheets therefor, when imported for use in the leather industry. The wording did not require import by an actual user. For the category covering the goods in question, no separate condition of proof of actual use was stipulated. The denial of exemption on the assumption that traders were excluded, or that the goods could be used in non-leather footwear without evidentiary basis, was therefore unjustified.

Conclusion: The exemption could not be denied on the ground that the importer was a trader or that actual user status was required.

Final Conclusion: The impugned order was held unsustainable, and the appeal succeeded with consequential relief.

Ratio Decidendi: A proforma invoice cannot, by itself, displace declared transaction value as contemporaneous import price, and an exemption notification cannot be denied on the basis of an implied actual-user requirement when the notification does not impose such a condition for the goods concerned.

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