Customs valuation on high-sea sale imports includes the canalising agency's sale price and service charges in assessable value.

For customs valuation of imports acquired on high-sea sale basis from a canalising agency, the relevant transaction value under Rule 4 of the Customs Valuation Rules, 1988 is the price charged by the canalising agency to the importer, not the agency's own purchase price from the foreign supplier. Service charges forming part of that sale transaction are includible in the assessable value. The Tribunal applied the Supreme Court's settled position that the sale from MMTC to the importer was the operative transaction for valuation, and that the revised invoice value including service charges stated the correct law.

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Issues: Whether, for valuation of imported goods purchased from MMTC on high-sea sale basis, the transaction value under Rule 4 of the Customs Valuation Rules, 1988 is the price paid by MMTC to the foreign supplier or the price charged by MMTC to the appellant, including service charges.

Analysis: The reference turned on identification of the relevant transaction for customs valuation where the import was initiated by MMTC but the bill of entry was filed by the appellant after the high-sea sale. The Tribunal treated the question as concluded by the Supreme Court's ruling that the service charges payable to MMTC were includible in the assessable value and that the relevant transaction for valuation was the sale from MMTC to the appellant. On that basis, the earlier view approving the revised invoice value was held to state the correct law.

Conclusion: The transaction value for purposes of Rule 4 is the transaction between MMTC and the appellant, and the inclusion of MMTC's service charges in the assessable value is affirmed.

Final Conclusion: The reference was answered by adopting the valuation basis that supports inclusion of the high-sea sale price charged by MMTC, and the matter was returned for disposal of the appeals accordingly.

Ratio Decidendi: In customs valuation of imports acquired on high-sea sale basis from a canalising agency, the relevant transaction value is the sale between the canalising agency and the importer, and service charges forming part of that transaction are includible in the assessable value.

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