Customs valuation requires lawful rejection of transaction value; enhancement based on alert pricing and consent letter was set aside.

Declared transaction value under the customs valuation scheme can be displaced only on legally recorded and evidentiary grounds, with contemporaneous import data used before resorting to sequential valuation. Enhancement of aluminium scrap value based merely on a valuation alert, LME-derived benchmark pricing, and an importer's consent letter was held unsustainable because the invoice value had not been independently shown false or unacceptable. The assessment and appellate orders were set aside, and the importer succeeded on the valuation issue.

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Issues: Whether the enhancement of the assessable value of imported aluminium scrap on the basis of a DGOV valuation alert and the importer's consent letter, without reliance on contemporaneous import data and without following the statutory valuation sequence, was sustainable.

Analysis: The enhancement was found to have been worked out mechanically from the DGOV circular by adopting the LME-based benchmark and discount, rather than from contemporaneous imports of identical or similar goods. The declared invoice value was not shown to be false or unacceptable on the basis of independent evidence, and no cogent reasons were recorded for rejecting the transaction value. The consent letter did not cure the illegality, because consent cannot override the mandate of Section 14 of the Customs Act, 1962 or the requirement under the valuation rules to reject the declared value only on legally sustainable grounds before moving to the sequential valuation mechanism.

Conclusion: The enhancement of value was held to be unsustainable and illegal. The challenge to the assessed value was accepted, and the importer succeeded on this issue.

Final Conclusion: The assessment orders and the appellate order were set aside because the declared transaction value could not be displaced merely by a DGOV circular or by a consent letter, in the absence of contemporaneous import evidence and lawful rejection of the invoice value.

Ratio Decidendi: Under the customs valuation scheme, the declared transaction value can be rejected only on legally recorded and evidentiary grounds, and enhancement based merely on a valuation alert, LME-derived notional pricing, or coerced consent is impermissible without contemporaneous import evidence.

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