Transaction value under customs law cannot be enhanced on LME prices alone without contemporaneous evidence and proper rejection of invoice value.

Transaction value under the customs valuation regime cannot be enhanced merely on the basis of a departmental alert circular and LME prices; rejection of the invoice value requires cogent reasons and supporting material, including contemporaneous imports of identical or similar goods where available. In the absence of evidence of any extra payment and without a proper order rejecting the declared value under the valuation rules, the enhancement was unsustainable. The declared transaction value was therefore required to be accepted, and the demand based on the enhanced valuation was set aside.

---

---

Issues: Whether the enhancement of the declared transaction value of imported scrap could be sustained on the basis of LME prices and a departmental alert circular in the absence of contemporaneous import evidence and a proper rejection of the invoice value under the valuation rules.

Analysis: The declared price was supported by the import invoices and there was no evidence of any amount paid over and above the declared value. The declared value was enhanced only on the basis of the departmental alert and LME prices. Such general criteria cannot by themselves displace the transaction value. The governing valuation framework requires the assessing authority to give reasons for rejecting the declared value and to support such rejection with material, including contemporaneous imports of identical or similar goods where available. The absence of contemporaneous import evidence, coupled with the absence of a proper order rejecting the declared value under the valuation machinery, made the enhancement unsustainable. The departmental circular and LME price could not override the statutory valuation rules.

Conclusion: The enhancement of the transaction value was invalid and the declared value was required to be accepted.

Final Conclusion: The demand based on enhanced customs valuation was set aside and the appeals succeeded with consequential relief.

Ratio Decidendi: Transaction value under the customs valuation regime cannot be rejected or enhanced on the basis of general market alerts or LME prices alone; the rejection must be supported by cogent reasons and contemporaneous evidence in accordance with the statutory valuation rules.

---