Declared export value cannot be rejected on market enquiry alone without first satisfying statutory safeguards under customs valuation rules.

Declared export FOB value cannot be rejected and re-determined on market enquiry alone for drawback purposes unless the proper officer first records cogent reasons to doubt the declared transaction value and satisfies the safeguards under the Customs Valuation Rules. Re-determination under the residual method cannot replace that threshold inquiry, and the absence of contemporaneous export data, relationship concerns, cash-flow issues, or other infirmities in the transaction value makes straightaway market enquiry-based revaluation impermissible. The declared value was therefore required to be accepted.

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Issues: Whether the declared FOB value of the export goods could be rejected and the value re-determined merely on the basis of market enquiry for drawback purposes.

Analysis: The governing scheme under the Customs Valuation Rules required the proper officer to first record cogent reasons for doubting the declared value and reject it only after applying the prescribed safeguards. Re-determination of export value under the residual method could not precede or substitute the formation of a valid basis for rejection of the declared value. In the present case, the adjudicating authority proceeded directly to market enquiry-based revaluation without establishing sufficient grounds to discard the declared transaction value. The appellate authority had correctly noted the absence of contemporaneous export data, the lack of any finding of relationship, cash flow, or other infirmity affecting the transaction value, and the impermissibility of straightaway applying the residual method.

Conclusion: The rejection of the declared value and the market enquiry-based re-determination of FOB value were not sustainable, and the respondent was entitled to acceptance of the declared value.

Ratio Decidendi: Declared export value cannot be rejected and re-determined on market enquiry alone unless the statutory preconditions for doubting and discarding the declared transaction value are first satisfied and recorded.

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