Customs valuation requires case-by-case scrutiny and fair hearing; uniform circular-based enhancement of transaction value was not sustained.

Import assessments were found vitiated where the adjudicating authority ignored importers' replies, requests for relied upon documents, and defence material, amounting to denial of a fair hearing. The declared transaction value also could not be rejected and enhanced through a uniform loading based on a departmental circular and LME prices. Valuation had to follow the sequential framework of the Customs Valuation Rules, with case-specific scrutiny, proper treatment of contemporaneous imports, and cogent reasons for discarding invoice value. On both issues, the assessee succeeded and the enhanced assessments were not sustained.

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Issues: (i) whether the original assessment orders were vitiated for breach of natural justice in not considering the importers' replies and requests for relied upon documents; and (ii) whether the declared transaction value could be rejected and enhanced by applying a uniform valuation method based on the DGOV circular and LME prices under the Customs Valuation Rules, 1988.

Issue (i): Whether the original assessment orders were vitiated for breach of natural justice in not considering the importers' replies and requests for relied upon documents.

Analysis: The record showed that in several cases replies to the show cause notices had in fact been filed and requests for relied upon documents had been made, yet the adjudicating authority proceeded on the footing that no reply had been received and no personal hearing had been availed. The orders also failed to deal with the defence material and other relevant correspondence. Such non-consideration of the importers' responses amounted to denial of a fair hearing.

Conclusion: This issue was decided in favour of the assessee.

Issue (ii): Whether the declared transaction value could be rejected and enhanced by applying a uniform valuation method based on the DGOV circular and LME prices under the Customs Valuation Rules, 1988.

Analysis: The show cause notice itself referred to contemporaneous imports, but the adjudicating authority did not adopt the comparable values in the manner required by the valuation rules. Instead, it moved directly to a residual approach and adopted a uniform loading based on prime metal prices under a departmental circular. The valuation rules, not administrative instructions, govern assessment, and rejection of invoice value requires case-specific scrutiny with cogent reasons. In the absence of a proper sequential application of the rules and without case-wise examination, the enhanced valuation could not stand.

Conclusion: This issue was decided in favour of the assessee.

Final Conclusion: The appellate order setting aside the assessments was sustained and the Revenue's appeals failed.

Ratio Decidendi: Transaction value cannot be rejected or enhanced on a uniform, circular-based approach; valuation must be made strictly under the Customs Valuation Rules on a case-by-case basis, with contemporaneous imports, if available, being given due effect and with observance of natural justice.

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