Declared transaction value cannot be rejected for import valuation merely on market enquiry or NIDB data without proper grounds.

Declared transaction value of imported goods cannot be rejected and enhanced merely on the basis of market enquiry or NIDB data unless the department first establishes valid grounds for rejection and follows the prescribed valuation sequence for redetermination. The declared invoice value here was not shown to be unsupported by evidence or otherwise non-genuine, and the reliance placed on a retracted statement together with NIDB data was held to be an improper basis for fixing assessable value. The enhancement was therefore unsustainable, and the order sustaining it was set aside, with complete relief granted against the valuation enhancement and consequential demand and penalty.

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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 of market enquiry and NIDB data, and whether the impugned order sustaining such enhancement was liable to be set aside.

Analysis: The declared invoice value was not shown to be unsupported by evidence or otherwise non-genuine. The department did not follow the valuation sequence prescribed for redetermination of value and instead relied on market enquiry prices. Such enhancement was not founded on sufficient reasons for rejection of transaction value or on proper contemporaneous import evidence. The statement relied upon had also been retracted, and reliance on that statement together with NIDB data was held to be an improper basis for fixing assessable value.

Conclusion: The enhancement of assessable value could not be sustained and the order affirming it was set aside in full.

Final Conclusion: The appeal succeeded and the assessee obtained complete relief against the valuation enhancement and consequential demand and penalty.

Ratio Decidendi: Declared transaction value cannot be rejected and enhanced merely on market enquiry or NIDB data unless the department first establishes valid grounds for rejection and redetermines value in accordance with the prescribed valuation sequence.

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