Transaction value rejection for imported goods upheld where foreign customs evidence showed false invoices and under-valuation.

Declared transaction value of imported goods may be rejected where investigation-based information from foreign customs authorities shows that the invoices are false and reflect only a fraction of the actual CIF value. The report here verified that the invoiced amounts were understated, that the invoices were issued at the importer's request, and that payment was made partly through DP terms with the balance remitted separately. On those facts, the declared price was not accepted as the true transaction value, and case law concerning mere photocopies of export documents was treated as inapplicable because the present matter rested on authenticated foreign customs evidence.

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Issues: Whether the declared transaction value of the imported goods could be rejected and enhanced on the basis of information received from the foreign customs authorities showing that the invoices were false and reflected only a fraction of the actual CIF value.

Analysis: The foreign customs authorities had verified the invoices and reported that the CIF values declared therein were false, that the invoices represented only about 30% to 33.6% of the actual CIF value, and that the false invoices had been issued at the request of the Indian importer. The report also stated that the invoiced amounts were settled on DP terms and the balance was paid by cheque or telegraphic transfer. On these facts, the declared value could not be treated as the true transaction value. The reliance placed on authorities dealing with mere photocopies of export documents was held to be inapplicable because the present case rested on investigation-based information supplied by the customs authorities of the exporting country.

Conclusion: The declared value was rightly rejected and the enhancement of value was upheld; the appeal failed.

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