Transaction value cannot be rejected without cogent doubt; confiscation upheld for breach of prior possession import condition, but valuation consequences reduced.

A used imported car was liable to confiscation because the importer failed to satisfy the pre-import condition of one year's prior possession abroad, and that breach of import policy attracted customs confiscation. However, the declared transaction value could not be rejected because there were no cogent grounds to doubt the invoice or evidence of a higher payment, so alternative valuation under Rule 8 was unsustainable. On that basis, the redemption fine and penalty were reduced.

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Issues: (i) Whether the imported car was liable to confiscation for breach of the pre-import condition requiring one year's prior possession abroad; (ii) Whether the declared transaction value of the imported car could be rejected and substituted for valuation, and what consequence followed for redemption fine and penalty.

Issue (i): Whether the imported car was liable to confiscation for breach of the pre-import condition requiring one year's prior possession abroad.

Analysis: The condition of minimum one year's prior possession abroad was not complied with, constituting a violation of the import policy condition. Such breach attracted confiscation under the customs law.

Conclusion: The confiscation was upheld, against the assessee.

Issue (ii): Whether the declared transaction value of the imported car could be rejected and substituted for valuation, and what consequence followed for redemption fine and penalty.

Analysis: The invoice showed a transaction value for a used car, and no cogent grounds were recorded for rejecting that declared value. There was no evidence that the invoice was forged or that more than the invoice price had been paid. In the absence of circumstances justifying rejection of the transaction value, valuation had to proceed on the declared price with lawful adjustment, and the enhanced valuation under Rule 8 was not sustained. On that footing, the redemption fine and penalty required moderation.

Conclusion: The rejection of the declared value was not justified, and the redemption fine and penalty were reduced in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of reduction in valuation-related consequences, while the confiscation for breach of the import condition remained intact.

Ratio Decidendi: In the absence of legally sustainable grounds to doubt the genuineness of the invoice or the truth of the declared price, the transaction value must be accepted and cannot be discarded merely to apply an alternative valuation method.

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