Transaction value cannot be rejected without corroborative evidence; unsupported valuation enhancement cannot sustain confiscation or penalties.

Imported goods must be valued under the transaction value principle unless the department establishes a genuine basis to reject it. Here, the department failed to produce corroborative evidence from the supplier or any independent source to disprove the importers' claim that the goods were stock lots, and relied mainly on one unsupported statement. On that material, enhancement of assessable value was unjustified. Because the valuation rejection failed, the consequential confiscation and penalties also could not stand, and the appeals were dismissed in favour of the assessees.

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Issues: Whether the department could reject the declared transaction value of imported stock lot goods and enhance the assessable value in the absence of corroborative evidence, and whether the consequential confiscation and penalties were sustainable.

Analysis: The valuation of imported goods under section 14 of the Customs Act, 1962 proceeds on the transaction value, and the Customs Valuation Rules, 1988 are attracted only when there is a genuine doubt or dispute regarding that value. The department did not produce evidence to disprove the importers' assertion that the goods were stock lots, nor did it adduce corroborative material from the supplier's end or from any independent source. The case rested substantially on the statement of one individual, without supporting evidence. In those circumstances, the rejection of declared value and resort to higher valuation was not justified. As the valuation basis failed, the consequential confiscation and penalties also could not be sustained.

Conclusion: The declared value could not be disturbed on the material placed by the department, and the confiscation and penalties were not sustainable. The appeals were therefore dismissed in favour of the assessees.

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