Conditional transaction value under customs valuation can be rejected where a discount depends on restricted use of imported goods.

Transaction value under the Customs Valuation Rules may be rejected where the sale price is conditional and the related consideration cannot be separately determined. Here, the special discount claimed by original equipment manufacturers was available only if the goods were used by such manufacturers, so the price depended on a condition affecting valuation. On that basis, the declared transaction value was not acceptable and the discount was added to the assessable value. The customs valuation adopted by the authorities was upheld, with the issue decided against the assessee and in favour of the Revenue.

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Issues: Whether the declared transaction value of imported goods could be rejected and the special discount claimed by original equipment manufacturers added to the assessable value under the Customs Valuation Rules.

Analysis: Rule 4(2)(b) permits rejection of transaction value where the sale price is subject to a condition or consideration for which no determinable value exists. The discount was available only if the goods were used by original equipment manufacturers, making the price conditional upon such use. On that basis, the declared transaction value was not acceptable for customs valuation and the discount was liable to be added to the declared value.

Conclusion: The rejection of the transaction value was correct and the special discount was rightly added to arrive at the assessable value; the issue is decided against the assessee and in favour of the Revenue.

Final Conclusion: The appeal failed and the valuation adopted by the customs authorities was upheld.

Ratio Decidendi: A transaction value may be rejected under Rule 4(2)(b) where the sale price is conditional on a requirement affecting the price and the related discount is not independently determinable.

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