Declared import value cannot be rejected on common directorship alone without proof of price influence or under-valuation.

Declared import value under section 14 of the Customs Act, 1962 could not be rejected merely because one director was common to the importer and the foreign supplier. The tribunal held that common directorship alone does not prove the parties were related in a manner that influenced price, and the revenue must produce reliable evidence of under-valuation, contemporaneous higher-priced imports, suppression, or other price influence before enhancing value. As no such material was shown, the 100% loading and enhancement of assessable value were set aside, with consequential relief to the importer.

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Issues: (i) whether the declared transaction value of imported goods could be rejected and enhanced by 100% merely because one director was common to the importer and the foreign supplier; and (ii) whether the revenue had discharged the burden of proving under-valuation or price influence so as to justify rejection of the declared value.

Issue (i): whether the declared transaction value of imported goods could be rejected and enhanced by 100% merely because one director was common to the importer and the foreign supplier.

Analysis: The declared value of imported goods is to be accepted under section 14 of the Customs Act, 1962 unless there is reliable evidence showing that the stated value is not the true transaction value. A common director between the importer and the foreign supplier, by itself, does not establish that the parties are related in a manner that automatically permits rejection of the declared value. In the absence of contemporaneous import data at a higher price or other material showing that the relationship influenced the price, rejection of the transaction value is not justified.

Conclusion: The declared transaction value could not be rejected merely on the basis of common directorship, and the 100% loading was unjustified.

Issue (ii): whether the revenue had discharged the burden of proving under-valuation or price influence so as to justify rejection of the declared value.

Analysis: Under the customs valuation framework, even where relationship is assumed, the declared value can be rejected only if it is shown that the relationship influenced the price. The burden to prove under-invoicing or non-genuineness of the declared price lies on the revenue. Since no satisfactory evidence of contemporaneous higher-priced imports, suppression, or price influence was produced, the statutory burden was not discharged.

Conclusion: The revenue failed to prove under-valuation or price influence, and the declared value was required to be accepted.

Final Conclusion: The enhancement of assessable value was set aside and the appeal succeeded with consequential relief to the importer.

Ratio Decidendi: A declared import value cannot be rejected on mere common directorship unless the revenue proves, by reliable evidence, that the relationship influenced the price or that contemporaneous market data shows a higher true value.

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