Customs valuation must follow Rule 12 and sequential rules; untranslated foreign documents and sampling-based suspicion cannot sustain rejection of declared value.

Customs valuation under the 2007 Rules permits rejection of declared value only through Rule 12, requiring disclosure of grounds, further inquiry if needed, and a reasonable opportunity of hearing before final decision. If rejection follows, valuation must then move sequentially under Rules 4 to 9. The authority failed to follow that process, relied on foreign-language documents without authenticated translations, and extended suspicion from two consignments to the remaining bills of entry through an impermissible sampling approach. The HC held that this violated the valuation rules and natural justice, and set aside the order while remitting the matter for fresh consideration.

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Issues: Whether the customs authority could reject the declared value and fix assessable value on the basis of two foreign documents without supplying authenticated translated copies and without following the sequential procedure under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Analysis: The declared value under the customs valuation framework can be rejected only in the manner prescribed by Rule 12, which requires the proper officer, when in doubt, to seek further information and then provide the importer with the grounds for doubt and a reasonable opportunity of being heard before taking a final decision. If the declared value is rejected, valuation must thereafter proceed sequentially under Rules 4 to 9. The authority bypassed this procedure by simultaneously proposing rejection of the declared value, adoption of the value of two consignments as the transaction value, and application of that value to the remaining bills of entry. The documents relied on were in a foreign language and were not furnished in authenticated translated form, depriving the importer of a meaningful opportunity to meet the material. The authority also adopted a sampling approach to extend suspicion from two consignments to the remaining transactions, which was impermissible in the facts of the case. The impugned order therefore suffered from non-compliance with the valuation rules and violation of natural justice.

Conclusion: The impugned customs valuation order was unsustainable and was set aside, with the matter remitted for fresh consideration in accordance with law.

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