Customs valuation requires proof before rejecting declared import value; higher comparable prices alone cannot sustain misdeclaration or penalty.

Transaction value for imported Palm Acid Oil could not be rejected merely because another importer paid a higher price; customs valuation required evidence that the declared price was non-commercial or that a recognised ground for rejection under the valuation rules existed. Where import prices fluctuated widely and no fixed market price was shown, the highest comparable import price could not be substituted without proof that the invoiced value was not the true transaction value. On the record, the declared value was accepted for assessment, the misdeclaration allegation failed, and the confiscation and penalty orders were unsustainable.

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Issues: Whether the transaction value of imported Palm Acid Oil was liable to be rejected and substituted by the highest comparable import price, and whether the resulting finding of misdeclaration of value, confiscation and penalty could be sustained.

Analysis: The import prices on record showed wide fluctuation during the relevant period, and there was no fixed market price for the goods. In such a situation, a particular declared value could be rejected only on the basis of evidence that the transaction was not commercial or that one of the specified grounds for rejection under the valuation rules existed. Mere reliance on a higher price paid by another importer was insufficient. No material showed that the appellant's imports from Malaysia and Indonesia were influenced by non-commercial considerations or that the invoiced prices did not represent the true transaction values. The substitution of declared value with the highest comparable price was therefore not justified, and the allegation of misdeclaration also could not stand.

Conclusion: The declared transaction value had to be accepted for customs assessment, and the orders of confiscation and penalty were unsustainable.

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