Customs valuation by contemporaneous imports: lowest comparable transaction value must be adopted when multiple prices are available.
Customs valuation of imported cooling pads was examined on the basis of contemporaneous imports of similar or identical goods. The declared value was found to be materially below comparable import prices, so the valuation machinery under customs law was applied. Where multiple comparable transaction values were available, the lowest contemporaneous value had to be adopted rather than an average of the range. Applying that principle, enhancement of value to Rs. 220 per kg was not sustainable when the lowest comparable value was Rs. 180 per kg, and duty was required to be redetermined on that lower basis.
Issues: Whether the assessable value of the imported cooling pads could be enhanced on the basis of contemporaneous imports, and if so, whether the lowest contemporaneous price or the average price was required to be adopted.
Analysis: The imported goods were compared with contemporaneous imports of similar or identical goods, and the declared value was found to be substantially lower than the comparable import prices. The valuation machinery under customs law was therefore held to be applicable. However, where more than one comparable transaction value was available, the appropriate course was to adopt the lowest value from the comparable range rather than the average value. On that basis, the value enhancement made at Rs. 220 per kg could not be sustained when the lowest contemporaneous value was Rs. 180 per kg.
Conclusion: The enhancement to Rs. 220 per kg was set aside to that extent, and the matter was sent back for redetermination of duty on the basis of Rs. 180 per kg, in favour of the assessee.
Final Conclusion: The appeal succeeded to the extent that the matter was remitted for reassessment on a lower comparable value.
Ratio Decidendi: For customs valuation based on contemporaneous identical imports, where multiple comparable values exist, the lowest comparable transaction value must be adopted.
TaxTMI 
AI Drafter ✕
TaxTMI 
