Customs valuation rules require reliable contemporaneous evidence before rejecting declared transaction value for imported goods.

Declared transaction value of imported ball bearings could not be rejected merely because the department relied on prices of allegedly comparable branded goods. The comparison goods were from a different manufacturer, with a different trade mark and brand name, and were not shown to be comparable in quality, quantity, or commercial attributes. In the absence of reliable contemporaneous evidence of like goods imported under comparable conditions, the transaction value under Section 14 of the Customs Act could not be displaced under Rule 4(1) of the Customs Valuation Rules, 1988, and Rule 4(2) did not apply. The declared value was therefore accepted and the contrary valuation was set aside.

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Issues: Whether the declared transaction value of imported ball bearings could be rejected and the assessable value determined by reference to prices of allegedly comparable branded goods under the Customs valuation rules.

Analysis: The imported goods were purchased from a trader in Singapore, while the relied-upon comparison goods were of a different manufacturer, different trade mark, different brand name, and not shown to be comparable in quality, quantity, or commercial attributes. Mere reliance on a general view that all Japanese brands are comparable was held insufficient. The declared value under Section 14 of the Customs Act could be displaced only on proof of contemporaneous imports of similar goods from the same country with comparable quality and quantity. In the absence of such evidence, the transaction value could not be discarded under Rule 4(1) of the Customs Valuation Rules, 1988, and the situation did not fall within Rule 4(2).

Conclusion: The rejection of the declared value was unsustainable and the valuation adopted by the lower authorities was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned valuation order was quashed with consequential relief according to law.

Ratio Decidendi: Declared transaction value under the customs valuation regime cannot be rejected unless the revenue proves reliable contemporaneous evidence of comparable imports of like goods in comparable quality and quantity.

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