Transaction value cannot be rejected merely because a minimum import price exists for similar goods.

A minimum import price fixed by DGFT for marble blocks could not, by itself, be used to reject the declared transaction value of marble slabs cleared by an EOU into the Domestic Tariff Area. The clearances were made to independent buyers, and there was no evidence of price manipulation or any special circumstance warranting departure from transaction value. Recasting the assessable value by treating the import price as the base under Rule 8 of the Customs Valuation Rules was not a legally approved valuation method on these facts. The rejection of transaction value and the resulting demand were therefore unsustainable, and the appeal was allowed.

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Issues: Whether the demand based on the Minimum Import Price fixed by the DGFT could be used to reject the declared transaction value and revalue the marble slabs cleared into the Domestic Tariff Area by the EOU.

Analysis: The demand rested mainly on a DGFT circular prescribing a minimum import price for marble blocks. The declared clearances were made to independent buyers, and there was no evidence of any manipulation of the sale price or of any special circumstance justifying rejection of the transaction value. A minimum import price for imports could not automatically be treated as the assessable value of the appellant's DTA clearances or as the cost of raw material for valuation purposes. The method adopted by the adjudicating authority, including recourse to Rule 8 of the Customs Valuation Rules by taking the minimum import price as the base, was not a legally approved basis for valuation in these facts.

Conclusion: The rejection of the transaction value and the consequent demand were unsustainable, and the appeal was allowed.

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