Customs valuation by contemporaneous imports requires substantially same quantity and commercial level before rejecting transaction value.

Declared value of imported base oil could not be enhanced on the basis of NIDB contemporaneous import data because the relied-upon comparables covered much smaller quantities and the lower authority had not examined quality parameters. For application of Rule 5 of the Customs Valuation Rules, 1988, the comparison must be with identical goods sold at the same commercial level and in substantially the same quantity. As the imports compared were not in substantially the same quantity, the contemporaneous data was not a valid basis to reject the transaction value, and the declared value was accepted.

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Issues: Whether the declared value of imported base oil could be enhanced on the basis of NIDB data drawn from contemporaneous imports of much smaller quantity.

Analysis: The imported quantity was 4000 MTs, whereas the relied-upon contemporaneous data related to imports of not more than 500 MTs. The lower authority had not examined the quality parameters of the imported goods vis-a -vis the comparable imports. For application of Rule 5 of the Customs Valuation Rules, 1988, the comparison must be with identical goods sold at the same commercial level and in substantially the same quantity. Since the quantities were not substantially the same, the contemporaneous data could not be used to enhance value.

Conclusion: The declared value could not be rejected or enhanced on the basis of the NIDB data, and the appeal was allowed.

Final Conclusion: Valuation of the imported goods had to be accepted on the declared transaction basis because the revenue data was not from imports of substantially the same quantity.

Ratio Decidendi: For customs valuation under Rule 5, contemporaneous import data can be relied upon only when the comparable goods are imported in substantially the same quantity and at the same commercial level.

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