Declared value enhancement requires a speaking order; without recorded reasons, re-determination of assessable value fails.

Declared transaction value may be rejected only on the basis of authentic material and the valuation rules must then be applied sequentially, but the proper officer must record a speaking order explaining why the declared value is rejected and how the re-determined value is arrived at. Where the record contains only assessed bills of entry and no recorded reasons or basis for enhancement, the valuation adjustment cannot be sustained on appellate scrutiny. On the facts discussed, the enhancement of assessable value was not upheld and the Revenue's challenge failed.

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Issues: Whether the enhancement of assessable value by rejection of the declared transaction value was sustainable when the assessing authority had not recorded a speaking order setting out the reasons for such rejection and re-determination.

Analysis: The dispute concerned imported cloves whose declared value was enhanced on the basis of external price references and contemporaneous import data. The record, however, contained only assessed bills of entry and no speaking order explaining why the declared value was rejected or how the enhanced value was determined. While questionable declared prices may be rejected on the basis of authentic material and the valuation rules must then be applied sequentially, the burden lies on the proper officer to record the reasons and the basis for re-determination. In the absence of such recorded reasoning, the appellate scrutiny of the enhancement could not be sustained.

Conclusion: The enhancement of value was not upheld and the Revenue's challenge failed.

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