Customs valuation enhancement requires contemporaneous import comparison; penalty reduced where valuation basis and delay made the quantum excessive.

The declared value was liable to rejection, but enhancement under the Customs Valuation Rules could not be sustained solely on the basis of a DRI letter without comparison to contemporaneous imports of identical or similar goods. The penalty was also considered excessive, given the delay in adjudication, the resulting demurrage and shipping charges, and the importer's first-time status. The penalty was therefore liable to be reduced.

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Issues: Whether the penalty imposed on the importer warranted reduction where the declared value was rejected, but the enhancement of value was not supported by comparison with identical or similar goods imported at or about the same time.

Analysis: The declared value was held to be liable for rejection. However, the enhancement of value by reliance on Rule 9 of the Customs Valuation Rules, 2007, solely on the basis of the DRI letter dated 06.01.2009, without comparison with contemporaneous imports of identical or similar goods, was found to be unjustified. The quantum of penalty was also considered excessive in light of the delay in adjudication, the resulting demurrage and shipping charges, and the fact that the importer was a first-time importer.

Conclusion: The penalty was liable to be reduced.

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