Customs valuation may be redetermined using contemporaneous imports when declared value is unreliable; ex parte appellate orders can fail.

Declared import value under the Customs Valuation Rules, 1988 may be rejected where contemporaneous import data, market enquiries, and comparable enhanced values show the transaction value is unreliable; the value may then be redetermined on the basis of comparable imports and best judgment. An appellate order is also unsustainable if the Revenue is not given an effective opportunity to be heard, including a meaningful chance to present counter-arguments. The stated result is that the enhancement of value was upheld and the ex parte appellate order was set aside, restoring the original adjudication.

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Issues: (i) Whether the declared import value could be rejected and enhanced on the basis of contemporaneous imports and market inquiry under the Customs Valuation Rules, 1988. (ii) Whether the appellate order was sustainable when the Revenue was not afforded an effective opportunity of hearing.

Issue (i): Whether the declared import value could be rejected and enhanced on the basis of contemporaneous imports and market inquiry under the Customs Valuation Rules, 1988.

Analysis: The declared value was not accepted where the Department had gathered contemporaneous import data, market enquiries, and accepted enhanced values for similar imported goods. The reasoning proceeded on the footing that the transaction value under the valuation rules can be discarded when surrounding material shows that the declared price is not reliable, and the value may then be determined on the basis of comparable imports and best judgment under the valuation framework.

Conclusion: The declared value was correctly rejected and enhancement to the contemporaneous value was justified, in favour of Revenue.

Issue (ii): Whether the appellate order was sustainable when the Revenue was not afforded an effective opportunity of hearing.

Analysis: The record showed that the appellate authority heard the respondents and decided the matter ex parte on the very day it had sought counter-arguments from the Revenue. The denial of an effective opportunity to present the Revenue's case rendered the appellate disposal procedurally unsound.

Conclusion: The ex parte appellate order could not stand, in favour of Revenue.

Final Conclusion: The enhancement of value was upheld and the order-in-appeal was set aside, with the original adjudication restored.

Ratio Decidendi: Declared import value may be rejected and redetermined on contemporaneous import evidence and comparable market material when the transaction value is not reliable, and an appellate order passed without affording an effective opportunity of hearing is unsustainable.

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