Customs valuation: transaction value cannot be rejected without comparable evidence, reasons, and a rule-based re-determination method.

Declared transaction value of imported goods could not be rejected merely by relying on higher third-party import prices, where the declared price was supported by a pre-notified inter-company price list and no evidence showed any flow-back or additional consideration to the foreign supplier. Comparison with another importer was unsound because the goods were not shown to be comparable in specification and included special modifications, additional painting, and other features that could justify a different price. The appellate order was also deficient because it gave no cogent reasons for discarding transaction value and did not state the valuation method or rule-based sequence to be applied after rejection. The rejection of the assessable value was therefore unjustified, and the appeal was allowed.

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Issues: Whether the declared transaction value of imported goods could be rejected on the basis of higher third-party import prices and whether the appellate order, after rejecting such value, disclosed a lawful basis and methodology for re-determination of value under the Customs Valuation Rules.

Analysis: The declared value was supported by a pre-notified inter-company price list and there was no evidence of any flow back or additional consideration to the foreign supplier. The comparison with third-party imports was found unsound because the goods imported by the third party were not shown to be comparable in specification and involved special modifications, additional painting, and other features that could justify a different price. The appellate order was also found to be cryptic, as it did not give cogent reasons for discarding the declared value and did not indicate the method or rule-based sequence to be followed after rejection of transaction value.

Conclusion: The rejection of the declared assessable value was not justified, and the appeal was allowed.

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