Customs valuation: contemporaneous import prices alone do not displace a supported transaction value without rebuttal evidence.

Declared transaction value under the Customs Valuation Rules, 1988 may be questioned where contemporaneous imports of identical or similar goods provide a basis for inquiry, but a mere minor price variation is not enough to discard the invoice price. If the importer supports the declared value with a genuine supply contract and surrounding commercial evidence, the department must rebut that explanation with material evidence before enhancing value. Where transaction value is rejected, valuation must then proceed sequentially under Rules 5 to 8. On the stated facts, the contract price was substantiated and the Revenue failed to dislodge it, so rejection of the declared value was not justified.

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Issues: Whether the declared transaction value of imported goods could be rejected under Rule 10A of the Customs Valuation Rules, 1988 on the basis of a higher contemporaneous import price, and whether the Revenue had established grounds to enhance the value.

Analysis: The declared value can be doubted where contemporaneous imports of identical or similar goods create a reasonable basis for inquiry, but a minor price variation by itself is not sufficient to discard the invoice price. Where the importer produces evidence explaining the difference, including a genuine supply contract and surrounding commercial circumstances, the declared value cannot be rejected unless the department dislodges that explanation with material evidence. If the transaction value is rejected, valuation must proceed sequentially under Rules 5 to 8 of the Customs Valuation Rules, 1988. In the present case, the contract price was supported by evidence and the Revenue did not rebut the explanation or show that the declared value was incorrect.

Conclusion: The rejection of the declared value was not justified and the Revenue's challenge failed.

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