Deductive valuation of imported goods failed without proper Rule 7 analysis of sale prices and discounts.

Re-determination of imported goods' assessable value under the deductive method was unsustainable because the authorities relied mainly on the importer's acceptance of the valuation chart and differential duty payment, without a proper Rule 7 analysis. The record did not show the required examination of how the deductive value was computed, including the treatment of Indian sale prices and claimed discounts. Mere acceptance of the chart could not validate the reassessed value. The valuation order was set aside and the matter remanded for fresh consideration of rejection of transaction value and, if necessary, re-determination under Section 14 and the valuation rules.

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Issues: Whether the re-determination of the imported goods' assessable value under the deductive method was sustainable when the lower authorities relied mainly on the importer's acceptance of the valuation chart and website sale prices without a proper Rule 7 analysis.

Analysis: The lower authorities rejected the declared value and reworked the assessable value by referring to the importer's website prices and the differential duty payment made to expedite clearance. The record showed no proper discussion of the legal requirements of Rule 7 or of the manner in which the deductive value had been computed in accordance with the rule. Mere acceptance of the chart and payment of differential duty could not, by itself, constitute a valid basis for confirming the reassessed value. The challenge to the use of Indian sale prices and the claimed discounts was not examined in the manner required for a lawful valuation exercise.

Conclusion: The re-determination of value could not be sustained and the impugned order was set aside. The matter was remanded to the original authority for fresh decision on rejection of transaction value and, if required, re-determination of value in accordance with the applicable provisions of Section 14 and the valuation rules.

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