Declared transaction value cannot be rejected on market enquiry alone, and appellate enhancement needs notice and record support.

Declared transaction value under the Customs Valuation regime cannot be displaced unless the department first establishes legally sustainable grounds for rejection; market enquiry, departmental instructions, or standing orders alone are insufficient. The declared value must be accepted under Section 14 of the Customs Act, 1962, read with the Customs Valuation Rules, 2007, unless valid reasons justify reassessment. An appellate authority also cannot enhance assessable value on a basis outside the record or without notice to the affected party. The impugned valuation order was set aside and consequential relief followed in accordance with law.

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Issues: (i) whether the appellate authority could enhance the assessable value beyond the value determined by the original authority without notice and on grounds not pursued below; (ii) whether the declared transaction value of the imported goods could be rejected and reassessed on the basis of market enquiry, departmental instructions, or standing orders.

Issue (i): whether the appellate authority could enhance the assessable value beyond the value determined by the original authority without notice and on grounds not pursued below.

Analysis: The appellate authority is confined to the record and the case made out in the proceedings below. Relief or a worse outcome cannot be founded on a case outside the pleadings or without notice to the affected party. Enhancement of value in appeal, when the issue before the appellate authority was only the challenge to the original reassessment, was held to be impermissible.

Conclusion: The enhancement of assessable value by the appellate authority was invalid and unsustainable.

Issue (ii): whether the declared transaction value of the imported goods could be rejected and reassessed on the basis of market enquiry, departmental instructions, or standing orders.

Analysis: Under Section 14 of the Customs Act, 1962, read with the Customs Valuation Rules, 2007, the declared transaction value must be accepted unless valid reasons exist to reject it. The burden lies on the department to displace the declared value by legally sustainable material. Resort to market survey, contemporaneous local price data, or standing instructions without first lawfully rejecting the transaction value was held to be impermissible.

Conclusion: The rejection of the declared transaction value and the reassessment on extraneous material were unsustainable.

Final Conclusion: The impugned valuation order was set aside and the appellant was held entitled to consequential relief in accordance with law.

Ratio Decidendi: A declared transaction value under the Customs Valuation regime cannot be displaced except on legally valid grounds, and an appellate authority cannot enlarge the assessment on a basis outside the record or without notice.

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