High sea sale valuation: actual contract price governs customs value, and notional commission cannot be added.

Where imported goods are purchased under a high sea sale agreement, customs valuation must follow the actual transaction value proved by the contract and payment documents. If the importer shows the agreed consideration and there is no evidence of any additional amount having been paid, rejection of the declared value and enhancement by reference to the foreign supplier's price is unsustainable. A notional commission also cannot be added on a conjectural basis when the transaction price is supported by documentary evidence and the departmental circular recognises the last buyer's actual high sea sale contract price as the transaction value. The declared value was therefore accepted and enhancement was rejected.

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Issues: Whether the declared high sea sale price of the imported goods was the correct transaction value for customs valuation, and whether enhancement of value by adopting the foreign supplier's price or a notional commission was justified.

Analysis: The imported goods were purchased under a high sea sale agreement and the appellant produced documentary evidence of the agreed consideration and payment. The value declared at the time of import was supported by the transaction documents, and there was no finding that any amount over and above the declared price had been paid. In this setting, the valuation had to be determined on the basis of the actual transaction between the high sea seller and the appellant. The circular issued by the Department also recognized that the actual high sea sale contract price paid by the last buyer would constitute transaction value, and that inclusion of commission on a notional basis would not be appropriate. The rejection of the declared value and enhancement on the basis of the supplier's price was therefore unsustainable.

Conclusion: The declared high sea sale price was held to be the correct transaction value, and the enhancement of assessable value was rejected in favour of the assessee.

Ratio Decidendi: Where the importer proves the actual high sea sale consideration and payment thereof, customs valuation must follow that transaction value and cannot be enhanced by adopting the foreign supplier's price or a notional commission.

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