Customs valuation may reject unreliable declared import prices and adopt contemporaneous comparable imports when undervaluation is evident.

Declared import value may be rejected where it is unrealistically low against contemporaneous comparable imports of the same origin, because customs valuation must reflect the ordinary competitive price under Section 14(1) of the Customs Act, 1962. Where the transaction value under Rule 4 is unreliable, customs may lawfully move to the alternative method under Rule 5 and adopt the comparable import price. Proof of extra payment is not essential if undervaluation is otherwise established, and authorities accepting steeply discounted invoice prices are inapplicable on such facts.

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Issues: Whether the declared import value could be rejected as unrealistically low and valuation determined on the basis of contemporaneous comparable imports under the Customs Valuation Rules, 1988.

Analysis: The declared price was found to be far below the prices of comparable contemporaneous imports of the same origin. The imported goods were sourced through traders in a third country, and the declared value did not reflect the ordinary competitive price in international trade. Section 14(1) of the Customs Act, 1962 requires customs valuation to correspond to the ordinary competitive price, and the transaction value method under Rule 4 is not mandatory where the declared value is unreliable. In such circumstances, recourse to the alternative method based on comparable goods under Rule 5 is lawful. The absence of proof of extra payment did not compel acceptance of the invoice price, because undervaluation itself justified rejection of the declared value. The relied-upon authorities supporting acceptance of a steeply discounted declared price were held inapplicable on the facts.

Conclusion: The rejection of the declared value and adoption of the lowest comparable contemporaneous import price was upheld, and the valuation order was sustained against the appellants.

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