Transaction value cannot be rejected on weak price comparisons where related-party imports and commercial differences distort valuation.

Declared transaction value of imported goods could not be rejected merely because the importer and exporter were related parties. The department's comparison with an International Price List and imports by third-party EOUs was insufficient, as those imports involved actual users enjoying customs duty exemption and were made in far smaller quantities. The difference in commercial level, import volume, discounts granted to other subsidiaries, and the importer's administrative and post-import costs showed that a bare invoice comparison did not reflect the effective price. The declared transaction value was therefore accepted and rejection of value was unjustified.

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Issues: Whether the declared transaction value of the imported goods could be rejected and substituted on the basis of the International Price List and comparison with imports by third-party EOUs.

Analysis: The importer and exporter were related parties, but the relationship by itself did not justify rejection of the declared value. The comparative data relied on by the department was found to be weak because the third-party imports were largely by EOUs, who were actual users and enjoyed customs duty exemption, whereas the appellant imported in bulk for stock and sale. The quantities imported by the third parties were only a small fraction of the appellant's imports, and the orders below had not properly accounted for the disparity in commercial level and import volume. The appellant's evidence on discounts granted by the foreign supplier to other subsidiaries, together with the administrative and post-import costs borne by the appellant, showed that the effective price was materially different from a bare invoice comparison. In these circumstances, the comparison with selected third-party imports and the International Price List was held to be insufficient for rejecting the transaction value.

Conclusion: The declared transaction value was to be accepted, and the rejection of value was unjustified.

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