Declared transaction value cannot be enhanced on NIDB data alone without proper comparison of similar imports and valid reasons.

Declared transaction value for imported goods cannot be rejected merely because contemporaneous imports or NIDB data indicate a higher figure. Where the importer supports the declared value with invoices, purchase orders and contracts, the department must show valid reasons and undertake a proper comparison of identical or similar goods in a comparable commercial transaction before invoking Rule 12 and revaluing under Section 14 and the Valuation Rules. Loosely comparable imports, without clear evidence of quantity, period or contractual similarity, are insufficient. On that basis, the enhanced assessable value was held unsustainable.

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Issues: Whether the enhancement of assessable value of imported goods on the basis of contemporaneous imports and NIDB data was sustainable when the importer had produced invoices, purchase orders and contracts supporting the declared transaction value.

Analysis: The imports were made under written purchase orders and detailed contracts, and the importer had furnished the invoice, purchase order and supporting contractual documents for the consignments in question. The contemporaneous imports relied upon by the department were not shown to be comparable in quantity, period or contractual terms, and the exact nature of the goods in those imports was not established with sufficient detail. Rule 12 permits rejection of declared value only on proper examination of the material and for valid reasons, and the explanation requires a meaningful comparison with identical or similar goods in a comparable commercial transaction. NIDB data is only an indicator and cannot by itself replace the statutory method of valuation under Section 14 and the Valuation Rules.

Conclusion: The enhancement of value was not justified and the reassessment based on contemporaneous imports and NIDB data could not be sustained. The issue is decided in favour of the assessee.

Ratio Decidendi: Declared transaction value cannot be rejected or enhanced merely on the basis of NIDB or loosely comparable contemporaneous imports unless the department establishes valid reasons and a proper comparison with identical or similar goods in a comparable commercial transaction under the valuation rules.

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