Declared import value needs reasoned valuation adjustments; relationship alone and uniform uplift cannot justify rejection.

Declared import value of goods from a related foreign supplier could not be rejected on the basis of relationship alone or on a blanket 55% enhancement derived from prices charged to unrelated buyers. The valuation exercise had to follow the prescribed sequential rules and account for relevant commercial differences, including commission and after-sales servicing. The adjudication was criticised as non-speaking because it did not explain the basis for the uniform uplift or why the price gap was treated as consistent across imports. On the record, the rejection of declared value and proposed enhancement were not sustainable, and the relief granted to the importer was upheld.

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Issues: Whether the declared import value could be rejected on the ground of relationship between the foreign supplier and the importer and a uniform 55% enhancement adopted on the basis of prices charged to unrelated buyers.

Analysis: The importer and the foreign supplier were related, but the material on record did not support a blanket enhancement of 55% across all imports. The adjudication order was found to be inadequate and not a speaking order, because it did not explain how the 55% figure was derived or why the price difference was treated as uniform. The record also showed that the difference between prices to the importer and to unrelated buyers was much lower in most cases. The pricing arrangement was linked to commission and after-sales servicing, and such commercial arrangements could not be ignored. Even where contemporaneous imports of identical goods were considered under the valuation rules, adjustments for commercial level and other relevant differences had to be made, and the value had to be determined by sequentially following the valuation rules.

Conclusion: The rejection of the declared value and the proposed enhancement were not sustainable. The appeal was rightly dismissed and the relief granted to the importer was upheld.

Final Conclusion: Valuation of imported goods from a related supplier must be determined on the basis of the valuation rules with proper adjustments for relevant differences, and a uniform enhancement without reasoned support cannot stand.

Ratio Decidendi: Declared import value cannot be rejected merely because the buyer and seller are related or because prices to unrelated buyers are higher, unless the authority applies the valuation rules sequentially and makes reasoned adjustments for relevant commercial differences.

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