Customs valuation follows the statutory exchange rate and transaction value, not import policy promises or private price arrangements.

Customs valuation of imported goods is governed by the Customs Act and valuation rules, so the transaction value and the statutory valuation date control rather than the importer's price arrangement with the foreign seller or the import policy. Where the Central Government has notified an exchange rate under the Act, that rate applies for conversion when assessing customs duty. The Court further held that purchase of Exim Scrips and the import policy did not create any enforceable promise preventing application of the statutory valuation method or the notified exchange rate. The duty assessment based on the Central Government's exchange rate was therefore upheld.

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Issues: Whether customs duty on imported goods was to be levied by valuing the goods at the price paid by the importer to the foreign seller or by applying the rate of exchange fixed by the Central Government under the Customs Act, and whether the import policy or purchase of Exim Scrips created any enforceable promise preventing such valuation.

Analysis: The valuation of imported goods for customs purposes was held to be governed by the Customs Act and the relevant valuation rules, not by the price arrangement between the importer and the foreign seller under the import policy. The value of imported goods was to be determined with reference to the statutory scheme, under which the transaction value is the governing method and the relevant date for valuation is the date of entry of the goods. On the question of exchange rate, the Court held that where the Central Government has determined the rate under Section 14(3)(i), that notified rate applies for conversion purposes. The Court also held that no case of promissory estoppel arose, because the import policy did not control the statutory method for determining customs value or the exchange rate applicable at the time of importation.

Conclusion: Customs duty was correctly assessed by applying the rate of exchange fixed by the Central Government, and the challenge to the valuation and duty demand failed.

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