Transaction value must be accepted absent valuation-rule exceptions; confiscation for unauthorised import stood, but fine and penalty were reduced.

Where the department cannot establish any applicable exception to acceptance of transaction value under the valuation rules, the declared import value must be accepted and resort to Rule 7 is unsustainable. The imported drawer locks were treated as consumer goods requiring licence, and the aluminium diamond levels were also regarded as falling within the relevant negative list entry, so confiscation for import without licence was maintained. However, the redemption fine and penalty were reduced in light of the reduced valuation and the surrounding facts, while the valuation objection succeeded.

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Issues: (i) whether the declared transaction value of the imported goods could be rejected and valuation determined by resort to Rule 7; (ii) whether the goods were liable to confiscation for import without licence and, if so, the extent of redemption fine and penalty.

Issue (i): whether the declared transaction value of the imported goods could be rejected and valuation determined by resort to Rule 7.

Analysis: The department did not establish that any of the exceptions under the proviso to Rule 4(2) applied. Rejection of the declared value rested only on the view that it appeared too low, which was held insufficient. In the absence of any applicable exception, the transaction value had to be accepted.

Conclusion: The declared value was accepted and the valuation adopted by resort to Rule 7 was set aside.

Issue (ii): whether the goods were liable to confiscation for import without licence and, if so, the extent of redemption fine and penalty.

Analysis: The imported drawer locks were consumer goods requiring licence, and there was no effective challenge to that conclusion. The aluminium diamond levels were also treated as falling within the relevant negative list entry, and the contrary contention was unsupported by material. However, the redemption fine had to be moderated having regard to the facts and the reduced valuation, and the penalty was correspondingly reduced.

Conclusion: The confiscation issue was sustained, but the redemption fine and penalty were reduced.

Final Conclusion: The appeals succeeded on valuation, while the confiscation findings were maintained with substantially reduced fine and penalty, resulting in a partial allowance of the matters.

Ratio Decidendi: Where no exception to acceptance of transaction value under the valuation rules is shown, the declared transaction value must be accepted; confiscation may stand for import without the required licence, but consequential fine and penalty can be reduced on the facts.

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