Transaction value in customs valuation cannot be rejected solely because the importer is related to an intermediary.

Declared transaction value of imported goods cannot be rejected merely because the Indian importer is related to an intermediary through whom the goods reach the ultimate buyer. Rejection of customs valuation requires the essential legal basis that the foreign supplier and the importer are related, and that premise was absent here. A relationship only between the importer and the intermediary was insufficient to displace the declared value or to substitute the intermediary's onward sale price as the assessable value. The declared transaction value was therefore held unsustainable for rejection on that ground, and reassessment on that basis was not justified.

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Issues: Whether the declared transaction value of imported goods could be rejected merely because the Indian importer was related to an intermediary through whom the goods were supplied to the ultimate buyer, when there was no allegation that the foreign supplier and the importer were related.

Analysis: The declared value had been discarded on the footing that the Indian importer and the intermediary were related persons. The essential premise for rejecting transaction value was absent because there was no charge that the foreign supplier and the importer were related. A relationship only between the importer and an intermediary, without more, did not justify rejection of the declared value or invocation of the customs valuation mechanism to substitute assessable value on the basis of the intermediary's onward sale price.

Conclusion: The rejection of the declared transaction value was unsustainable and the assessable value could not be revised on that basis.

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