Customs valuation enhancement rejected for bypassing the prescribed sequence and relying on an unsupported market survey.

Declared transaction value of imported goods was rejected in favour of a market survey-based enhanced assessable value, but the valuation method failed to follow the sequential scheme under the Customs Valuation Rules, 2007. Contemporaneous import data of identical goods was available, yet the survey report did not disclose the purchase or sale invoices used to fix the average price, and an ad hoc discount was applied without a legally sustainable basis. The enhancement was therefore not legally sustainable, and the impugned valuation order was set aside in favour of the assessee.

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Issues: Whether the enhanced assessable value of the imported goods, fixed on the basis of a market survey instead of the declared transaction value and the statutory valuation sequence, was legally sustainable.

Analysis: The imported goods were supported by contemporaneous import data of identical goods, yet the declared value was rejected and the department resorted to a market survey conducted by its officers. The survey report did not disclose purchase or sale invoices relied upon for fixing the average price, and an ad hoc discount was applied to reach the assessable value. The valuation method adopted did not follow the sequential scheme under the Customs Valuation Rules, 2007, and no legally sustainable basis was shown for bypassing the prescribed valuation steps.

Conclusion: The enhancement of value was not legally sustainable and the impugned order was set aside in favour of the assessee.

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