Transaction value of imported rough diamonds cannot be rejected without proof under customs valuation rules.

Declared transaction value for imported rough diamonds could not be rejected on the basis of appraising officers' views or trade panel opinions where the invoice was not shown to be fabricated or unreliable and no buyer-seller relationship was alleged. The Customs Valuation Rules required rejection of transaction value only if the case fell within the proviso to rule 4(2), and that basis was not established. The declared value was therefore accepted, and confiscation and penalty could not be sustained on the material relied upon by the department.

---

---

Issues: Whether the declared transaction value of imported rough diamonds could be rejected and the goods confiscated with penalty.

Analysis: The declared value was the transaction value and the invoice was not shown to be fabricated, fake, or otherwise unreliable. No relationship between importer and exporter was alleged. The material relied upon by the department, including appraising officers' views and trade panel opinions, was insufficient to displace the declared value. The transaction value could be rejected only if the import fell within the proviso to rule 4(2) of the Customs Valuation Rules, 1988, and such basis was not established.

Conclusion: The declared value was accepted, and the order of confiscation and penalty was unsustainable.

---