Transaction value cannot be rejected on weak comparable-import data without corroboration; valuation, demand and penalty were set aside.

Declared transaction value could not be rejected merely on NIDB data, alleged comparable imports of different quantity or packaging, or an uncorroborated office sheet where there was no contemporaneous evidence of branded goods or false declaration, so the re-determined value and differential duty for the nine Bills of Entry were set aside. The duty demand for those Bills of Entry was also barred by limitation because the clearances were assessed in the normal course and suppression was not shown. For Bill of Entry No. 8177874, proceedings under Section 28 were competent, but the same valuation materials were insufficient to reject the declared value or sustain confiscation, redemption fine or duty demand. The partner's penalty was set aside because the underlying undervaluation and suppression allegation failed.

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Issues: (i) whether the declared transaction value of the goods cleared under the nine Bills of Entry could be rejected and re-determined on the basis of NIDB data and alleged comparable imports; (ii) whether the demand in relation to those nine Bills of Entry was barred by limitation for want of suppression; (iii) whether the declared value of the goods imported under Bill of Entry No. 8177874 could be rejected on the basis of the materials relied upon by the department; and (iv) whether the penalty imposed on the partner was sustainable.

Issue (i): whether the declared transaction value of the goods cleared under the nine Bills of Entry could be rejected and re-determined on the basis of NIDB data and alleged comparable imports.

Analysis: The goods covered by the nine Bills of Entry had been assessed and cleared by the proper officer, and there was no contemporaneous evidence that the declared goods were branded or that the declared value was false. The rejection of the transaction value was founded on NIDB data and on comparisons with imports of different quantity and character. Such data, without proof that the goods were identical or similar and without corroborating evidence against the declared value, was held insufficient to discard the transaction value.

Conclusion: The re-determination of value and the consequential differential duty for the nine Bills of Entry were not sustainable and were set aside.

Issue (ii): whether the demand in relation to those nine Bills of Entry was barred by limitation for want of suppression.

Analysis: The nine Bills of Entry had been assessed in the normal course and duty had been paid at the time of clearance. No material was shown to establish suppression of facts or misdeclaration before the assessing officer so as to justify invocation of the extended period.

Conclusion: The demand relating to the nine Bills of Entry was barred by limitation as well.

Issue (iii): whether the declared value of the goods imported under Bill of Entry No. 8177874 could be rejected on the basis of the materials relied upon by the department.

Analysis: The Bill of Entry was not provisionally assessed; only the goods were released provisionally on bond and bank guarantee, so proceedings under Section 28 of the Customs Act, 1962 were competent. On merits, the department again relied on NIDB data, alleged comparable imports of different quantity and packaging, and a sheet recovered from the appellant's office, none of which established that the declared transaction value was liable to be rejected. The comparison with small packaged imports was not treated as reliable evidence of identical or similar goods, and no sufficient basis was shown to load the value.

Conclusion: The rejection of the declared value and the consequential demand, confiscation and redemption fine in respect of Bill of Entry No. 8177874 were not sustainable.

Issue (iv): whether the penalty imposed on the partner was sustainable.

Analysis: The penalty on the partner was founded on the same valuation dispute. Once the allegation of suppression and undervaluation was not established, no independent basis remained for penal action against the partner.

Conclusion: The penalty imposed on the partner was set aside.

Final Conclusion: The impugned order was set aside in its entirety and both appeals succeeded.

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