Declared transaction value cannot be rejected on NIDB data alone without independent proof that the import price is unreliable.

In customs valuation, the declared transaction value of related-party imports cannot be rejected unless the Department first proves with independent evidence that the invoice value is incorrect and that the relationship influenced the price. Mere reliance on NIDB data or contemporaneous import references is insufficient without showing true comparability in quality, quantity, origin and commercial terms, and without recording concrete reasons for doubting the declared value. On the facts, no such foundational evidence was shown, so re-determination of assessable value was unsustainable.

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Issues: Whether the Revenue was justified in rejecting the declared transaction value of the imported goods and re-determining the assessable value solely on the basis of NIDB data and contemporaneous import references.

Analysis: The importer and overseas supplier were related, so the transaction value could be accepted only if the relationship had not influenced the price. The governing framework under Rule 3(3) of the Customs Valuation Rules, 2007 required the Department first to show that the declared invoice value was incorrect before resorting to substitute valuation. The record did not disclose independent evidence that the relationship affected the price, nor was there material showing why the declared values were unreliable. Mere reliance on NIDB data was insufficient, because comparable contemporaneous imports had to be shown to match in quality, quantity, country of origin and other commercial factors. The appellate order also failed to demonstrate communication of concrete reasons for doubting the declared value.

Conclusion: The rejection of the declared value and its re-determination on the basis of NIDB data was unsustainable, and the issue is decided in favour of the assessee.

Final Conclusion: The imported goods could not be enhanced in value merely on the strength of contemporaneous data without first establishing that the declared transaction value was incorrect under the valuation rules.

Ratio Decidendi: In customs valuation, the declared transaction value cannot be rejected or substituted merely on the basis of NIDB data unless the Department first proves, with independent evidence, that the declared value is incorrect and that the relied-upon comparables are truly comparable.

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