Import transaction value cannot be rejected on suspicion where evidence shows a general trade discount and no contrary material exists.

Declared import transaction value cannot be rejected merely because a discount is questioned as non-standard; rejection requires supporting material, and any enhanced assessable value must then be determined under the Customs Valuation Rules, 1988. Where a supplier's certificate shows the discount is generally available to purchasers and the department produces no contemporaneous price data or other evidence that the discount is special, abnormal, or contrary to trade practice, suspicion is insufficient to displace the declared value. On those facts, rejection of the transaction value and consequent enhancement of assessable value were held unsustainable in favour of the assessee.

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Issues: Whether the declared transaction value of the imported goods could be rejected and the assessable value enhanced on the basis that the discount claimed was not a normal trade discount.

Analysis: The declared value of an import is subject to scrutiny, but rejection of the transaction value must be supported by material and the assessable value must then be determined under the Customs Valuation Rules, 1988. The lower authorities disbelieved the discount on the footing that it was not shown to be in accordance with trade practice and that the goods were not purchased in bulk, but those findings were not supported by evidence. The supplier's certificate indicated that the discount was generally available to purchasers, and no contemporary price data or other evidence was produced to show that the discount was special or abnormal.

Conclusion: The rejection of the declared transaction value and the consequent enhancement of assessable value were not sustainable, and the issue was decided in favour of the assessee.

Ratio Decidendi: Where the declared import value is supported by evidence of a general discount and the department adduces no material to prove that the discount is special, abnormal, or contrary to trade practice, the transaction value cannot be rejected merely on suspicion.

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