Declared transaction value must be rejected first before customs authorities can adopt a later valuation method.

Customs valuation must begin with the declared transaction value, and the authority may move to a later valuation method only after validly rejecting that value under the Customs Valuation Rules, 2007. Where the Revenue enhanced the import value without first discarding the declared transaction value, re-determination under the subsequent rules was held impermissible. On those facts, the valuation enhancement could not be sustained, and the Commissioner (Appeals) was correct in setting it aside.

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Issues: Whether the Revenue could re-determine the value of imported goods without first rejecting the declared transaction value under the Customs Valuation Rules, 2007.

Analysis: The basis of customs assessment is the transaction value, unless it is shown to be incorrect or affected by extraneous considerations. The Revenue had proceeded to enhance value and apply the subsequent valuation rule without first rejecting the declared transaction value. The rule-based scheme requires the declared value to be discarded before moving to later methods of valuation. In the absence of such rejection, recourse to re-determination under the later rules was not permissible.

Conclusion: The declared transaction value could not be superseded in the facts of the case, and the Commissioner (Appeals) was in setting aside the enhancement.

Final Conclusion: The Revenue's challenge to the valuation enhancement failed, and the order of the Commissioner (Appeals) was left undisturbed.

Ratio Decidendi: Under the customs valuation scheme, the declared transaction value must be rejected on valid grounds before the authority can adopt a different method of valuation.

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