Customs valuation cannot be enhanced through local market inquiry when Rule 5 requires comparison with identical imported goods.

Rule 5 of the Customs Valuation Rules, 1988 permits comparison of imported goods only with the value of identical imported goods, after making prescribed adjustments for commercial level, quantity and relevant variations. A local market inquiry does not satisfy that statutory test and cannot by itself justify enhancement of assessable value. On that basis, the valuation increase was not sustainable, and the appellate view in favour of the importer was upheld.

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Issues: Whether assessable value of imported goods could be enhanced on the basis of local market inquiry by invoking Rule 5 of the Customs Valuation Rules, 1988.

Analysis: Rule 5 applies to comparison with the value of identical imported goods, subject to the prescribed adjustments for commercial level, quantity and other relevant variations. A local market inquiry does not answer that statutory test. The enhancement of value on that basis was therefore not supported by the rule invoked, and the appellate authority's interference with the assessment was justified.

Conclusion: The valuation enhancement based on local market inquiry under Rule 5 of the Customs Valuation Rules, 1988 was not sustainable, and the finding in favour of the respondent was upheld.

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