Customs valuation must follow due process, with disclosure of relied-upon material and a speaking order before enhancing value.

Rejection of declared customs value and enhancement of assessable value must follow the prescribed valuation procedure and principles of natural justice. The importer must be informed of the grounds for doubt, given access to the relied-upon comparable import material, and afforded a reasonable opportunity of hearing before the value is rejected. Where required, a speaking and appealable order must be issued; enhancement made without disclosure of the basis or compliance with procedure is not sustainable. The matter is to be reconsidered by the original authority in accordance with law, without any finding on the merits of the valuation dispute.

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Issues: Whether the enhancement of the assessable value of the imported goods, without disclosure of the materials relied upon and without issuance of a speaking order before clearance, was sustainable.

Analysis: The declared transaction values were rejected and the assessable values were enhanced on the basis of contemporaneous imports. The record showed that the departmental authorities did not issue speaking orders despite requests, nor did they disclose the relied-upon comparable import data to the importer. The governing Board circular required rejection of declared value only after following the prescribed procedure, including intimation of the grounds for doubt, opportunity of hearing, and issuance of an appealable order when the declared value was rejected. The appellate authority's reasoning that the request for a speaking order came after clearance of the goods was not accepted, as the enhancement itself had been made without adherence to the prescribed procedure and in breach of natural justice.

Conclusion: The enhancement of assessable value could not be sustained; the orders were set aside and the matter was remanded to the original authority to issue a speaking order after disclosure of the material relied upon and after granting a reasonable opportunity of hearing.

Final Conclusion: The appeals succeeded to the extent that the valuation enhancements were annulled and reconsideration was directed in accordance with law, without any finding on the merits of the valuation dispute.

Ratio Decidendi: Rejection of declared customs value and enhancement of assessable value must comply with the prescribed valuation procedure and principles of natural justice, including disclosure of relied-upon material, opportunity of hearing, and a speaking order where required.

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