Customs valuation: declared transaction value cannot be rejected without evidence or Rule 4(2) justification.

Declared transaction value in customs valuation cannot be rejected merely on suspicion; it must be backed by material evidence and by recorded circumstances satisfying Rule 4(2) of the Customs Valuation Rules, 1988. Where the supplier's invoice is genuine on the record, payment is made through proper banking channels, and no facts are shown to disbelieve the invoice or remittance, enhancement of value is not justified. The commentary also notes that market fluctuation in computer items, without more, does not support rejection of the declared price. The declared value was therefore required to be accepted and the enhanced valuation set aside.

---

---

Issues: Whether the declared transaction value of imported goods could be rejected and enhanced in the absence of material showing that the invoice was fake or that payment was not made through proper banking channel, and where the requirements of Rule 4(2) were not specifically addressed.

Analysis: The declared value was supported by the supplier's invoice and there was no material evidence to disbelieve the invoice or the remittance. The lower authorities had not set out the circumstances contemplated by Rule 4(2) of the Customs Valuation Rules, 1988 for rejecting the transaction value. In light of the nature of the goods and the possibility of market fluctuation in computer items, rejection of the declared value was not justified.

Conclusion: The declared value of US $61 per piece was directed to be accepted, and the enhanced valuation was set aside in favour of the assessee.

Ratio Decidendi: In customs valuation, the declared transaction value cannot be rejected without material evidence and without recording the statutory circumstances justifying such rejection.

---