Customs valuation cannot rest on dissimilar imports or unrelated statements when declared value lacks a valid basis for enhancement.

Declared value of imported watch modules could not be enhanced on the basis of an alleged admission or alleged contemporaneous imports, because the recorded statements contained no admission on the value of the goods in issue and the relied-upon statement concerned a different supplier. The comparative imports were found unsuitable since they involved a different importer, different supplier, smaller quantity, later importation and, in one case, branded goods that were not comparable. Rule 5 of the Customs Valuation Rules, 1988 was therefore inapplicable, and the enhancement of value and resulting duty demand were not sustainable.

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Issues: Whether the enhancement of the declared value of imported watch modules was justified on the basis of an alleged admission and contemporaneous imports, and whether Rule 5 of the Customs Valuation Rules, 1988 was applicable.

Analysis: The recorded statements did not contain any admission regarding the value of the goods imported in the present case, and the statement relied upon related to a different supplier. The contemporaneous import relied upon was found to be distinguishable because it involved a different importer, different supplier, a smaller quantity, post-parcel importation, and a later time period. The later import by the same importer was also found unsuitable for comparison because the goods were branded and not comparable. On these facts, the rule invoked for loading of value was held inapplicable.

Conclusion: The enhancement of value was not sustainable and the duty demand based on such enhancement could not be upheld. The appeal was allowed.

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