Declared transaction value cannot be rejected without evidence of suppression or extra consideration in customs valuation

Declared transaction value under Section 14 of the Customs Act and the Customs Valuation Rules, 1988 could not be rejected merely because two consignments moved in the same vessel and were imported at different prices. Invoices and purchase orders supported both agreed prices as genuine transaction values, and no independent evidence showed extra consideration, suppression, or any basis to doubt the declared value. The enhancement from US $ 146 per MT to US $ 165 per MT was therefore arbitrary and unsupported by the valuation framework. The declared transaction value ought to have been accepted.

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Issues: Whether the enhancement of the import value from US $ 146 per MT to US $ 165 per MT was justified by rejecting the declared transaction value under Section 14 of the Customs Act read with the Customs Valuation Rules, 1988.

Analysis: The imported goods comprised different quantities purchased at different agreed prices, and the record contained invoices and purchase orders supporting both prices as genuine transaction values. The Revenue accepted the higher price for one lot but enhanced the value of the other lot merely because both consignments moved in the same vessel and the importer had imported goods at different prices. No independent evidence was produced to show additional consideration, suppression, or any ground for doubting the declared transaction value. In these circumstances, the enhancement amounted to an arbitrary rejection of the transaction value and was unsupported by the valuation framework.

Conclusion: The enhancement of value was not justified and the declared transaction value ought to have been accepted; the issue is decided in favour of the assessee.

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