Customs valuation must rest on recorded reasons; unsupported enhancement cannot sustain confiscation, fine or penalty.

Transaction value of imported goods must be accepted under Section 14 of the Customs Act where buyer and seller are unrelated and price is the sole consideration, unless the proper officer records reasons to doubt its truth or accuracy and follows the prescribed valuation process. Here, the declared value was enhanced without recorded reasons for rejection, so the revaluation was unsustainable. As the enhancement failed, the consequential confiscation, redemption fine and penalty also could not be sustained, and the assessee was held entitled to consequential relief, including refund of the differential duty deposited with applicable interest.

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Issues: Whether the declared transaction value of the imported goods could be rejected and enhanced, and whether the consequential confiscation, redemption fine and penalty could be sustained.

Analysis: Section 14 of the Customs Act requires acceptance of the transaction value where the buyer and seller are not related and price is the sole consideration, subject to the valuation rules. Rejection of the declared value can be made only when the proper officer has reasons to doubt the truth or accuracy of that value and follows the prescribed process. In the present case, no reasons were recorded for rejecting the declared value before undertaking revaluation and enhancement. Since the enhancement itself was found unsustainable, the consequential levy of redemption fine and penalty could not survive.

Conclusion: The rejection and enhancement of the declared transaction value were unlawful and the orders imposing confiscation, redemption fine and penalty were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessee was entitled to consequential relief, including refund of the differential duty deposited with applicable interest.

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