Customs valuation of imported scrap must be tested against the speaking order and contemporaneous import data before reversal.

Declared value of imported aluminium scrap could not be upheld on appeal without examining the speaking order, contemporaneous import data and the valuation basis used to reject transaction value. The appellate authority had set aside the re-determination without addressing the specific reasons recorded by the assessing authority, including reliance on NIDB data, contemporaneous imports and the LME-linked approach under the Customs Valuation Rules, 2007. That omission made the appellate order unsustainable, so it was set aside and the matter remanded for fresh consideration on the valuation issue.

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Issues: Whether the order of the appellate authority setting aside rejection and re-determination of the declared value of imported aluminium scrap could be sustained when the reasons recorded in the speaking order and the contemporaneous import data relied upon by the assessing authority were not examined.

Analysis: The assessing authority had rejected the declared transaction value on the basis of contemporaneous imports, NIDB data and the LME-linked valuation approach, and had re-determined the assessable value under the Customs Valuation Rules, 2007. The appellate authority, while allowing the assessee's appeals, did not examine the specific reasons recorded in the speaking order or the bills of entry relied upon for rejection of value, and instead proceeded on grounds not actually considered by the assessing authority. Since the appellate order did not address the basis on which transaction value had been rejected, the order could not be sustained.

Conclusion: The appellate order was set aside and the matter was remanded for fresh consideration, which is in favour of Revenue.

Final Conclusion: The dispute was restored to the appellate authority for a fresh decision after examining the valuation basis and the rival contentions.

Ratio Decidendi: Where an appellate authority interferes with rejection of declared value, it must examine the speaking order and the material relied upon for valuation; failure to do so justifies remand for fresh adjudication.

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