Declared import value cannot be rejected without proof of extra consideration or related-party influence under customs valuation rules.

Declared import value cannot be rejected merely by comparing it with higher prices of different imports where the Revenue does not prove that the invoice price is not the actual transaction value, or that there is extra consideration, related-party influence, mutuality of interest, or any flow back. Imports made directly from the manufacturer were held not truly comparable with third-party imports routed through an authorised foreign dealer, and disclosed commission arrangements alone did not justify enhancement. The note states that the declared value remained consistent with Section 14 of the Customs Act, 1962, so the valuation adopted by the lower authorities was unsustainable.

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Issues: Whether the declared transaction value of goods imported by the assessee for its own stock and sale could be rejected and enhanced by reference to the value of identical goods imported for third parties under Rule 5 of the Customs Valuation Rules, 1988, read with Rule 9 of those Rules.

Analysis: The imports for the assessee's own account were made directly from the manufacturer, while the third-party imports were routed through an authorised foreign dealer. The Revenue produced no material to show that the invoice price reflected anything other than the actual transaction value or that there was any extra consideration, mutuality of interest, or impermissible flow back. The existence of disclosed commission arrangements under the agreement did not, by itself, justify rejection of the declared value. Since the two classes of imports were not truly comparable, the declared value could not be loaded by reference to third-party import prices. The transaction value was also consistent with Section 14 of the Customs Act, 1962.

Conclusion: The declared transaction value was required to be accepted and the enhancement of value was unsustainable.

Final Conclusion: The assessee succeeded and the valuation adopted by the lower authorities was set aside.

Ratio Decidendi: Where the Revenue fails to prove that the declared import price is not the actual transaction value or that there is extra consideration, related-party influence, or a flow back, the transaction value cannot be rejected merely on the basis of higher prices of differently situated comparable imports.

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