Declared import value cannot be enhanced on quotations or a proforma invoice without independent evidence of unreliability.

Declared import value cannot be rejected under the Customs Valuation Rules, 1988 merely on quotations, a proforma invoice, or another importer's later consent-based enhancement; those materials do not by themselves displace the transaction value without independent evidence that the declared price is unreliable. Once valuation enhancement fails, confiscation and penalty based on alleged misdeclaration of value also fail because their foundation disappears. The impugned order was set aside and consequential relief followed.

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Issues: (i) whether the declared value of imported goods could be rejected and enhanced on the basis of quotations, a proforma invoice, and a later import accepted by another importer; (ii) whether confiscation and penalty could survive once the valuation enhancement failed.

Issue (i): whether the declared value of imported goods could be rejected and enhanced on the basis of quotations, a proforma invoice, and a later import accepted by another importer;

Analysis: The valuation scheme under the Customs Valuation Rules, 1988 requires the declared transaction value to be tested first and, only if it is lawfully rejected, to proceed sequentially through the remaining rules. A quotation or proforma invoice is only an offer and does not, by itself, furnish a legally sustainable basis for enhancement. A later import by another importer, where enhancement was accepted on consent, cannot be treated as conclusive comparable data in a different case, especially when there is no evidence of extra consideration, flow-back, or any material showing that the declared price was not the real transaction value.

Conclusion: The rejection and enhancement of the declared value were unsustainable and the issue was decided in favour of the appellant.

Issue (ii): whether confiscation and penalty could survive once the valuation enhancement failed;

Analysis: Confiscation and penalty were founded on the alleged misdeclaration of value. Once the enhanced valuation could not be supported on legally admissible material, the basis for treating the goods as liable to confiscation and for imposing penalty also failed.

Conclusion: Confiscation and penalty were not sustainable and this issue was decided in favour of the appellant.

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

Ratio Decidendi: A declared import value cannot be rejected or enhanced merely on the strength of quotations, a proforma invoice, or another importer's later accepted value, unless there is independent material showing that the declared transaction value is unreliable.

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