Customs valuation requires proof of comparable identical or similar goods before rejecting declared import value on contemporaneous data.

Declared transaction value for imported polyester knitted fabric cannot be rejected solely on selected contemporaneous import data unless the goods relied on are shown by evidence to be identical or similar and commercially comparable in quality, quantity and characteristics. Under Section 14(1) of the Customs Act and Rules 12 and 5 of the 2007 Valuation Rules, value enhancement requires a legally sustainable basis and a proper comparative exercise; mere reliance on bill of entry data is insufficient without independent evidence of undervaluation. The rejection of declared value and reassessment on that basis were not sustained, and the matter was remanded for fresh adjudication.

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Issues: Whether the declared transaction value of imported polyester knitted fabric could be rejected and the value enhanced on the basis of contemporaneous import data without establishing that the relied-upon imports were identical or similar goods in terms of quality, quantity, characteristics and commercial comparability.

Analysis: The valuation scheme under Section 14(1) of the Customs Act, 1962 and Rules 12 and 5 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 permits rejection of declared value only on legally sustainable grounds and, where contemporaneous imports are relied upon, requires a proper comparison with identical or similar goods. The record showed that the enhancement was made merely from selected bill of entry data and the lower authorities did not establish that the cited imports were comparable in quality, quantity or characteristics. No independent evidence of undervaluation beyond the contemporaneous data was brought on record, and the mandatory comparative exercise was not undertaken.

Conclusion: The rejection of the declared value and the reassessment based on the cited contemporaneous imports were not sustained; the impugned orders were set aside and the matter was remanded for fresh adjudication.

Ratio Decidendi: Declared value under the customs valuation rules cannot be discarded on the sole basis of contemporaneous import prices unless the goods relied upon are shown, by evidence, to be identical or similar and comparable in the relevant commercial parameters.

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