Customs valuation and statement admissibility failed where no comparable imports were shown and Section 138B procedure was not followed.

Declared transaction value in customs valuation could not be rejected merely because one earlier bill of entry had been enhanced; without evidence of contemporaneous imports of identical or similar goods or another recognised ground, the declared value had to be accepted and the undervaluation allegation failed. Statements recorded during investigation under Section 108 could not be used without compliance with the mandatory procedure under Section 138B and without cross-examination when sought; those statements therefore lacked evidentiary value, and the proceedings were vitiated on that ground also.

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Issues: (i) whether the declared transaction value of the imported goods could be rejected on the basis of a prior enhanced value in one bill of entry and absence of contemporaneous import data; (ii) whether statements recorded during investigation could be relied upon without compliance with Section 138B and without cross-examination.

Issue (i): Whether the declared transaction value of the imported goods could be rejected on the basis of a prior enhanced value in one bill of entry and absence of contemporaneous import data.

Analysis: The Revenue did not produce evidence of contemporaneous imports of identical or similar goods at a higher price. Rejection of the declared value was based essentially on enhancement in one earlier bill of entry and a broad application of that enhanced price to varied imports over time from different suppliers and countries. Such a basis was held to be insufficient. The Customs Valuation Rules require the transaction value to be accepted unless it is shown to be unacceptable on legally recognised grounds, and comparable contemporaneous imports are necessary before the declared value can be displaced.

Conclusion: The rejection of transaction value was unsustainable and the undervaluation finding failed.

Issue (ii): Whether statements recorded during investigation could be relied upon without compliance with Section 138B and without cross-examination.

Analysis: The adjudicating authority relied upon statements recorded under Section 108 of the Customs Act, 1962 without first examining the makers of the statements in the manner required by Section 138B and without allowing cross-examination when sought. The statutory procedure governing admissibility of such statements is mandatory, and non-compliance deprives the statements of evidentiary value for proving their contents.

Conclusion: The statements could not be relied upon and the proceedings were vitiated on this ground as well.

Final Conclusion: The impugned order could not be sustained, and the appeals succeeded with consequential relief according to law.

Ratio Decidendi: In customs valuation disputes, the declared transaction value cannot be rejected without evidence of contemporaneous comparable imports or another legally recognised ground, and statements recorded during investigation are inadmissible for proving their contents unless the mandatory procedure under Section 138B is followed.

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