Customs valuation dispute: genuine supplier discount supported by negotiations, so declared import value could not be rejected.

A declared import value supported by tendering, price discussions and purchase-order confirmation was accepted as the true transaction value. The overseas supplier had revised the financial bid to a project-linked price, and the discount was not shown to be artificial or unsupported. On that basis, rejection of the assessable value under the Customs Valuation Rules, 2008 was not justified, because Revenue had not established that the declared price was anything other than the actual transaction value. The assessment based on rejection of value was therefore set aside, with relief following for the importer.

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Issues: Whether the discount allowed by the overseas supplier on the imported machinery was genuine and whether the declared assessable value could be rejected under the Customs Valuation Rules, 2008.

Analysis: The declared value was based on a negotiated price arrived at after tendering, price discussions, and subsequent confirmation by purchase order. The record showed that the supplier finally agreed to revise the financial bid to the project-linked price, and the discount was not shown to be artificial or unsupported. In such circumstances, the Revenue's objection to the discount under Rule 12 of the Customs Valuation Rules, 2008 could not be sustained.

Conclusion: The discount was accepted as genuine and the declared transaction value could not be rejected.

Final Conclusion: The assessment founded on rejection of the declared value was set aside and relief followed in favour of the importer.

Ratio Decidendi: A declared import value supported by contemporaneous negotiations and contractual confirmation cannot be rejected merely because the supplier allowed a substantial discount, unless the Revenue establishes that the price was not the true transaction value.

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