Customs valuation must follow sequential rules; declared import value cannot be rejected on website prices alone.

Declared transaction value for imported dog food and snacks could not be rejected merely on website prices or market inquiry without concrete evidence and compliance with the customs valuation hierarchy. The Tribunal held that the Customs Valuation Rules, 2007 had to be applied sequentially, with contemporaneous prices of similar goods under Rule 5 considered before resorting to Rule 7. As contemporaneous NIDB data showed values comparable to the declared prices and no acceptable basis existed to show extra payment to the supplier, the enhancement of value and resulting duty demand were unsustainable.

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Issues: Whether the declared transaction value of the imported dog food/snacks could be rejected and the value enhanced on the basis of website prices and market inquiry without first applying the customs valuation rules sequentially and considering contemporaneous import prices of similar goods.

Analysis: The Tribunal held that the department had no concrete evidence to reject the transaction value under Section 14 of the Customs Act, 1962 merely on the basis of website prices. It further held that the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had to be applied sequentially and that Rule 5, dealing with similar goods and contemporaneous import prices, ought to have been applied before resorting to Rule 7. The contemporaneous NIDB data showed prices comparable to the declared values, and there was no acceptable legal basis or evidence to justify rejection of the transaction value or to show any additional payment to the supplier.

Conclusion: The rejection of the declared transaction value and the consequent duty enhancement were unsustainable, and the appeal was allowed with consequential relief to the assessee.

Ratio Decidendi: Declared transaction value cannot be rejected on mere suspicion or website-based price comparison unless the department first establishes legally acceptable grounds and applies the customs valuation rules sequentially, including consideration of contemporaneous values of similar goods.

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