Export valuation must follow sequential rules, and declared FOB cannot be reduced without proving true comparability.

The dispute concerns valuation of export goods under the Customs Valuation (Determination of Value of Export Goods) Rules, 2007, particularly whether the declared FOB value could be rejected for DEPB purposes. The Judicial Member stressed sequential application of the Rules: transaction value must be accepted unless properly rejected under Rule 8, and Revenue must then establish comparability before resorting to residual valuation. He found the market enquiry inadequate because the alleged comparables were not shown to be of the same variety, description, dimensions or quality, and the declared FOB was accepted. The Technical Member disagreed, holding that Rule 6 valuation was justified on the material. The difference was referred to a Third Member.

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Outcome: The Members delivered differing opinions on whether the declared FOB value of the export goods could be rejected and re-determined for DEPB purposes, and the matter was referred for decision by a Third Member.

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