Customs valuation by contemporaneous market evidence upheld where invoice prices were not proved to reflect true import value

Declared invoice values for imported bearings were rejected because the surrounding correspondence and supply pattern did not sufficiently prove that the goods were sold only from old stock at reduced prices. The Tribunal treated the supplier's contemporaneous circular letter as reliable evidence of special net prices for India and upheld valuation on that basis under Section 14 of the Customs Act. On that footing, the lower authorities were justified in treating the goods as misdeclared, and confiscation and penalties were sustained.

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Issues: Whether the declared invoice prices of the imported bearings could be accepted as the true transaction value, and whether the department was justified in treating the goods as misdeclared and assessing duty on the basis of the higher contemporaneous price indicated in the supplier's circular letter.

Analysis: The declared prices were not accepted at face value because the surrounding correspondence and quantities supplied did not satisfactorily support the claim that the goods were sold only out of old stock at reduced prices. The evidence relied upon by the importers did not conclusively establish that the invoiced prices represented the normal international price at the time of importation. By contrast, the circular letter of 7-2-1977, issued by an authorised supplier and addressed to the Indian market, was treated as reliable evidence of the special net prices for India. On that basis, the Tribunal held that the assessable value could properly be derived from the deemed value principles under Section 14 of the Customs Act, and that the lower authorities were justified in rejecting the invoice values.

Conclusion: The importers' declared prices were held to be declared, the higher price indicated in the circular letter was accepted for assessment, and the confiscation and penalties were sustained.

Ratio Decidendi: Where the evidence does not establish that the invoice price reflects the true import value, the assessable value may be determined on the basis of reliable contemporaneous market evidence under Section 14 of the Customs Act, and a proved under-valuation amounts to misdeclaration.

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