Customs value enhancement requires disclosure of relied-upon material before rejection of declared value

Declared customs value cannot be enhanced on the basis of manufacturer quotations, website prices or market enquiry material unless the importer is given disclosure of the relied-upon material and a fair opportunity to rebut it. Rule 10A of the Customs Valuation Rules permits further inquiry only where doubt about the declared value rests on a lawful basis, and valuation cannot be sustained if material used against the importer is withheld. The enhancement order was therefore set aside for breach of natural justice, and the matter was remanded for disclosure and reconsideration after hearing the importer.

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Issues: Whether enhancement of the declared customs value could be sustained on the basis of manufacturer quotations, website prices and market enquiry material that had not been disclosed to the importer, and whether the adjudication order was vitiated for breach of natural justice.

Analysis: The declared transaction value was sought to be rejected and enhanced on the strength of extracts from communications by manufacturers, internet-based price information and market enquiry reports. Rule 10A of the Customs Valuation Rules permits further inquiry where the assessing officer has reason to doubt the correctness of the declared value, but such doubt must rest on a lawful basis and the importer must be given a fair chance to meet the material relied upon. The undisclosed portions of the manufacturer communication, the particulars of the website-derived material and the market enquiry reports were not furnished to the importer. Material relied upon for enhancement must be disclosed and subjected to rebuttal before it can form the basis of a valuation order.

Conclusion: The enhancement order could not be sustained as it violated natural justice. The matter was remanded for disclosure of the relied-upon evidence and reconsideration after hearing the importer.

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