Customs valuation permits rejection of declared transaction value where import documents and contemporaneous prices show the real value differently.

Imported goods must be valued under section 14 of the Customs Act, 1962 and the Customs Valuation Rules, 1988 on the price ordinarily prevailing at the time and place of importation. Transaction value is acceptable only if it reflects the true price and satisfies statutory conditions; where the proper officer has reason to doubt the declared value, Rule 10A permits rejection and use of alternative methods. The claimed contract price was unsupported by original import documents, while contemporaneous market materials and comparable imports indicated a substantially higher real value. The declared transaction value was therefore rejected and the enhanced assessable value fixed by the customs authorities was upheld.

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Issues: Whether the declared transaction value of the imported cloves was liable to be rejected and the goods valued on the basis of contemporaneous import prices under the Customs Act, 1962 and the Customs Valuation Rules, 1988.

Analysis: Section 14 of the Customs Act, 1962 read with the Customs Valuation Rules, 1988 requires imported goods to be valued on the basis of the price ordinarily prevailing at the time and place of importation, and the transaction value is acceptable only when it reflects the true price and satisfies the statutory conditions. Where the proper officer has reason to doubt the declared value, Rule 10A permits rejection of that value and resort to alternative valuation methods. The claimed contract price was not supported by the original contract or invoices relating to the imports, and the document relied upon was treated only as a certificate rather than a binding contract. The contemporaneous materials, including market bulletins and comparable imports of similar cloves at substantially higher prices, supported the department's valuation and showed that the declared price did not reflect the real import value.

Conclusion: The declared transaction value was rightly rejected and the enhanced assessable value fixed by the customs authorities was upheld. The challenge to the customs valuation failed.

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