Customs valuation requires disclosure, fair procedure, and comparable evidence before declared transaction value can be rejected.

Declared transaction value remains the primary basis for customs valuation, and any departure from it requires a lawful basis, disclosure of the reasons for rejection, and a fair opportunity to rebut the material relied upon. The text states that the customs authorities could not enhance assessable value without a proper show cause notice or valid comparable evidence. Alleged contemporaneous imports were not shown to be sufficiently comparable on factors such as quality, grade, or specification, and later-produced data could not cure the non-disclosure at the original assessment stage. The rejection of transaction value and the enhanced assessment were therefore unsustainable, with consequential relief granted to the importer.

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Issues: Whether the customs authorities could reject the declared transaction value and enhance the assessable value without issuing a proper show cause notice, disclosing the basis of rejection, and establishing valid comparable evidence.

Analysis: Transaction value is the primary basis for customs valuation under Rule 4 of the Customs Valuation Rules, and departure from it requires a lawful basis and fair procedure. In the present case, the assessment was made without communicating reasons for rejection of the invoice value or furnishing the material relied upon for enhancement, leaving the importer unable to meet the case against it. The supposed reliance on contemporaneous imports was also not satisfactorily established, as the cited imports were materially different in value and were not shown to be comparable on relevant factors such as quality, grade, or specification. Data produced later at the hearing could not cure the defect, particularly when it was neither the basis of the original assessment nor disclosed to the importer for rebuttal.

Conclusion: The rejection of transaction value and the enhanced assessment were unsustainable, and the issue is decided in favour of the appellant.

Final Conclusion: The assessment order and the appellate order upholding it were set aside, and the appeals succeeded with consequential relief.

Ratio Decidendi: A declared transaction value cannot be displaced for customs valuation unless the authority follows fair procedure, discloses the basis for rejection, and supports enhancement with legally comparable evidence.

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