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Issues: (i) whether the assessable value of imported cordless telephones could be enhanced merely on the basis of quotations; (ii) whether the value could be enhanced by relying on an import of a different telephone model as a comparable transaction.
Issue (i): whether the assessable value of imported cordless telephones could be enhanced merely on the basis of quotations.
Analysis: The valuation adopted by the Revenue rested on quotations obtained from a foreign manufacturer. The governing principle applied was that assessable value cannot be enhanced on the basis of quotations alone, without reliable supporting evidence establishing the correct import value.
Conclusion: The enhancement on the basis of quotations alone was not sustainable and was decided in favour of the assessee.
Issue (ii): whether the value could be enhanced by relying on an import of a different telephone model as a comparable transaction.
Analysis: The comparable import cited by the Revenue related to Model WT 8910, whereas the goods imported by the assessee were Models WT 3990, LS 825 and LS 827. As the model relied upon by the Revenue was different from the imported models, the transaction was not a proper basis for valuation enhancement.
Conclusion: The enhancement based on a different model was not sustainable and was decided in favour of the assessee.
Final Conclusion: The valuation enhancement and consequential penalty did not survive, and the impugned order was set aside.
Ratio Decidendi: Assessable value of imported goods cannot be enhanced merely on quotations or on an incomparable transaction involving a different model of goods.
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