Similar goods valuation fails where defective wire cuttings are not truly comparable in quality or condition.

Enhancement of assessable value under Rule 6 of the Customs Valuation Rules, 1988 was held unsustainable for a mixed lot of defective GI and insulated wire cuttings. Although misdeclaration was accepted, the goods were not of standard or comparable quality, and the defects, sizes and lengths varied materially. The concept of similar goods applies only where goods are comparable in features, volume, quality and other relevant properties. Because the department relied on the value of other defective goods without establishing true comparability, the proposed valuation was rejected and the assessee succeeded on the valuation issue.

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Issues: Whether the enhancement of assessable value by applying Rule 6 of the Customs Valuation Rules, 1988 on the basis of imports of similar goods was sustainable in respect of a mixed lot of defective GI and insulated wire cuttings.

Analysis: The goods were found to be a mixed lot of defective wires of different sizes and lengths. Although misdeclaration was accepted, the goods were not of a standard or comparable quality, and the nature of defect or second quality was variable. The concept of similar goods under the Customs Valuation Rules applies only where the goods are comparable in features, volume, quality and other properties. Since the enhancement was based on the assessed value of other defective goods, the valuation adopted by the department was not justified.

Conclusion: The enhancement of value under Rule 6 was unsustainable, and the assessee succeeded on the valuation issue.

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