Undervaluation and transaction value: invoice price could not be rejected without reliable proof of extra consideration or flow back.

Undervaluation was not proved because the record did not contain cogent evidence of flow back, additional consideration, or any price difference between clearances to genuine buyers and those routed through brokers. Stock statements given to a bank were held insufficient to establish suppression or undervaluation. In the absence of reliable material showing that Section 4(1)(a) was inapplicable, there was no basis to discard the invoice value or invoke Section 4(1)(b) and the valuation rules. The transaction value therefore remained acceptable and the Revenue's challenge failed.

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Issues: Whether the Revenue had established undervaluation and warranting rejection of the invoice value and recourse to the valuation rules on the basis of alleged higher depot sales, broker-mediated clearances, and bank statements.

Analysis: The material on record did not show any cogent evidence of flow back, additional consideration, or a price difference between clearances to genuine buyers and those routed through brokers. The factual foundation for discarding the invoice value was absent, and the reliance placed on stock statements furnished to the bank was insufficient to prove undervaluation. In the absence of reliable evidence showing that Section 4(1)(a) was inapplicable, there was no justification for invoking Section 4(1)(b) and the valuation rules.

Conclusion: The finding of undervaluation was not established and the transaction value could not be rejected; the Revenue's challenge failed.

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