Declared export value must be rejected by reasoned notice and fair hearing before alternative valuation is adopted.

Declared FOB export value cannot be rejected without a reasoned notice, disclosure of the basis for disbelief, and an effective opportunity to respond. Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 requires the authority to follow the prescribed valuation sequence and rely on cogent evidence before adopting an alternative method. Because the order did not adequately explain the rejection of the declared value and natural justice concerns were raised, the valuation determination was set aside and the matter remitted to the original authority for fresh adjudication after hearing the exporter and applying the rules correctly.

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Issues: Whether the declared FOB value of export goods could be rejected without a proper notice and cogent reasons, and whether the matter should be remanded for fresh adjudication in accordance with the export valuation rules and principles of natural justice.

Analysis: The declared export value was reduced on the basis of a market enquiry and supporting material, but the order did not satisfactorily disclose why the declared value was disbelieved. Where rejection of declared value is proposed, the exporter must be informed of the basis for such rejection and given an effective opportunity to respond. Rule 8 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007 requires a proper and reasoned process before resorting to alternative valuation methods, and the valuation exercise must proceed on proper and cogent evidence after following the statutory sequence. The record also disclosed a grievance of denial of natural justice, so the matter required reconsideration by the original authority.

Conclusion: The valuation order could not be sustained in its present form, and the matter was remitted to the original authority for fresh adjudication after issuing a proper notice, considering the explanation of the respondent, and applying the valuation rules in the correct sequence.

Final Conclusion: The dispute was sent back for de novo consideration, with no finding on the merits of valuation or DEPB entitlement.

Ratio Decidendi: Before rejecting a declared export value, the authority must give a reasoned notice, afford a fair hearing, and apply the statutory valuation rules sequentially on cogent evidence.

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