Transaction value in customs valuation must be rejected only on tangible evidence, not suspicion, for stock lot imports.

Transaction value for stock lot LCD TVs was described as the proper basis of customs assessment under Section 14 of the Customs Act, 1962, and could be discarded only on cogent, tangible evidence. The article states that where the importer disclosed the nature of the goods as assorted stock lots sold on an as-is-where-is basis, mere suspicion, market inquiry, dealer inquiry, or NIDB data did not prove misdeclaration or under-valuation. In the absence of evidence of additional payment or flow-back of money, enhancement of assessable value was unsustainable, and the consequential redemption fine and penalty also could not be maintained.

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Issues: Whether the declared transaction value of stock lot LCD TVs could be rejected and the assessable value enhanced on the basis of alleged misdeclaration, market inquiry and NIDB data, and whether the consequential redemption fine and penalty could be sustained.

Analysis: The goods were shown by the contemporaneous correspondence to be stock lot goods sold on an as-is-where-is basis, with assorted models and brands, and the foreign supplier was not obliged to supply model numbers for each piece. The importer had disclosed the correct quantity, size and brand, and had previously informed the customs authorities that country of origin, model number and similar particulars could not be furnished for each piece because of the nature of the stock lot. The legal position under Section 14 of the Customs Act, 1962 is that transaction value is the basis of assessment in the ordinary course of business, and under the Customs Valuation Rules it can be discarded only on the basis of cogent and tangible evidence. Mere suspicion, market enquiry, dealer enquiry or reference to NIDB data, without proof of additional payment or other reliable evidence showing that the declared price was not genuine, is insufficient to reject the declared value. On the facts, there was no evidence of flow-back of money or other material showing under-valuation.

Conclusion: The enhancement of value was unsustainable, the transaction value had to be accepted, and the orders imposing redemption fine and penalty also could not stand; the assessee succeeded and the Revenue's appeal failed.

Ratio Decidendi: Transaction value under Section 14 of the Customs Act, 1962 can be rejected only on the basis of tangible evidence demonstrating inaccuracy or falsity, and not on mere doubt or suspicion, particularly where the import consists of stock lot goods declared in accordance with their commercial nature.

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