Declared transaction value and sequential customs valuation rules govern assessable value where undervaluation is not proved.

Declared transaction value cannot be rejected without cogent evidence of undervaluation, and customs valuation must proceed sequentially under the prescribed rules before resorting to the residual method. Here, the Department relied on email and internet-based material without contemporaneous evidence of identical or similar imports at a higher price, while the Chartered Engineer's report used local market prices and assumptions, which was not a proper basis for assessable value. The rejection of the invoice value and the valuation adopted on that report were therefore unsustainable, and the assessee succeeded.

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Issues: Whether the rejection of the declared transaction value and adoption of valuation based on a Chartered Engineer's report, without sequential compliance with the Customs Valuation Rules, was legally sustainable.

Analysis: The dispute concerned valuation of imported goods and the validity of the Department's approach in discarding the invoice value. The record showed that the Department relied on an email and Internet-based information, but did not bring contemporaneous import evidence of identical or similar goods at a higher price. The Chartered Engineer's valuation was based on local market prices in India and on assumptions for certain items, which was found to be an improper basis for determining assessable value. The applicable legal framework required the declared transaction value to be accepted unless it was shown to be unacceptable, and if rejected, the Department had to proceed sequentially through the valuation rules rather than directly invoking the residual method.

Conclusion: The rejection of the transaction value and the valuation adopted on the basis of the Chartered Engineer's report were held to be unsustainable, and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Declared transaction value cannot be rejected without cogent evidence of undervaluation, and the customs authority must apply the valuation rules sequentially before resorting to the residual method.

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