Declared transaction value cannot be rejected on higher comparable import prices alone without evidence of undervaluation.

Declared transaction value for imported Scotch whisky concentrate could not be rejected merely because contemporaneous imports showed higher prices. The importer's statements and supplier correspondence supported the explanation that the lower price reflected negotiated commercial terms, and the record showed no extra payment or other evidence that the declared price was not the true price actually paid or payable. Mere price variation in comparable imports was insufficient to prove undervaluation. On that basis, rejection of the transaction value was unsustainable, and the duty demand and penalties could not be upheld.

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Issues: Whether the declared transaction value of the imported Scotch whisky concentrate could be rejected and enhanced on the basis of contemporaneous imports, and whether the resulting duty demand and penalties were sustainable.

Analysis: The importer explained, through recorded statements and supporting correspondence, that the lower price was the result of negotiated commercial terms and that the goods were supplied for dilution and sale, not for blending with Indian whisky. The foreign supplier's letter supported the explanation that different blends carried different malt content and pricing, and that the imported product was suitable for direct consumption after dilution with water. The record did not show any payment over and above the declared import price or any material to displace the declared transaction value. Mere existence of higher prices in other imports did not, by itself, justify rejection of the declared value, and the Revenue failed to establish undervaluation.

Conclusion: The rejection of transaction value was unsustainable, and the duty demand and penalties could not be upheld.

Ratio Decidendi: A declared transaction value cannot be rejected merely because comparable imports reflect higher prices unless the Revenue proves, with evidence, that the declared price is not the true price actually paid or payable.

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