Transaction value in customs valuation must be accepted absent proof of unrealistic pricing or special circumstances justifying rejection.

Declared transaction value of imported goods under a long-term supply agreement with a genuine price variation formula linked to market indices had to be accepted under the Customs valuation framework. Contemporaneous imports from different suppliers, countries of origin and, in some cases, different quantities were not reliable comparables for enhancement. In the absence of evidence that the declared price was unrealistic or that special circumstances justified departure from the transaction value, rejection of the declared value was not permissible. Reliance on cases involving unrealistic or fixed-price transactions was inapplicable on these facts, and enhancement of assessable value was therefore unsustainable.

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Issues: Whether the declared transaction value of imported goods could be rejected and enhanced on the basis of contemporaneous imports from different suppliers and countries, despite an undisputed variable price contract and absence of special circumstances.

Analysis: The imports were made under a long-term supply agreement containing a price variation formula linked to market indices, and the department did not dispute the genuineness of that pricing formula. The contemporaneous imports relied upon for enhancement were from different suppliers, different countries of origin and, in some instances, different quantities, which made them unreliable comparables for valuation. In the absence of evidence showing that the declared value was unrealistic or that any special circumstances existed to justify departure from the declared price, the transaction value was required to be accepted under the Customs valuation framework. The reliance placed on higher third-party imports and on authorities dealing with unrealistic or fixed-price transactions was held inapplicable on the facts.

Conclusion: The declared transaction value could not be rejected, and the enhancement of assessable value was unsustainable.

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