Customs value enhancement requires recorded reasons and a speaking order before departing from the declared transaction value.

Reassessment of imported goods that departs from the declared transaction value must comply with Section 17 of the Customs Act, 1962, including recorded reasons and a speaking order where the proper officer rejects self-assessment under sub-section (4). Enhancement based only on contemporaneous import data and internal customs references was not sustainable because no reasons for rejecting the manufacturer's invoice were communicated and no speaking order was passed. In the absence of disclosed statutory compliance or material discrediting the invoice, the declared CIF transaction value could not be displaced on contemporaneous data alone.

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Issues: Whether reassessment of the imported goods by enhancing the declared transaction value, without recording reasons in a speaking order under Section 17(5) of the Customs Act, 1962, was legally sustainable.

Analysis: The reassessment was made by loading the declared CIF value on the basis of contemporaneous import data and internal customs references, but no reasons for rejecting the declared value were communicated and no speaking order was passed. Under Section 17 of the Customs Act, 1962, where re-assessment under sub-section (4) is contrary to the importer's self-assessment, the proper officer is required to pass a speaking order under sub-section (5) within the prescribed time. The declared goods were imported under a manufacturer's invoice, and there was no material to discredit its genuineness. In the absence of disclosed reasons or compliance with the mandatory statutory procedure, enhancement of value could not be sustained on the basis of contemporaneous data alone.

Conclusion: The reassessment and value enhancement were unsustainable, and the importer was entitled to retain the declared transaction value.

Ratio Decidendi: Reassessment of imported goods that departs from the importer's declared value must be supported by recorded reasons and a speaking order under Section 17(5) of the Customs Act, 1962; absent such compliance, arbitrary enhancement of value cannot stand.

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