Transaction value requires disclosed reasons and an opportunity to be heard before rejection; undisclosed comparator pricing invalidates reassessment.

Challenge to rejection of declared transaction value under the Customs Valuation Rules focuses on Rule 12's requirement that an officer who doubts declared value must disclose reasons, request further information, and give a reasonable opportunity to be heard before rejecting value. The article emphasises that transaction value supported by invoice, contract and bank realisation cannot be discarded without cogent reasons; contemporaneous import prices may be used only if comparator selection and data are disclosed and shown to satisfy comparability criteria. On the facts summarized, the reassessment by reference to NIDB contemporaneous prices failed for lack of disclosure and opportunity, and the appellate rejection was set aside.

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Issues: Whether the rejection of the importer's declared transaction value and the enhancement of assessable value by adopting contemporaneous import prices from other ports was lawful.

Analysis: The Court examined the statutory framework governing customs valuation, principally Section 14 of the Customs Act, 1962 and the Customs Valuation Rules, 2007 (notably Rule 3 and Rule 12). Rule 12 mandates that when the proper officer has reason to doubt the truth or accuracy of the declared value, the officer must request further information and, if doubt persists, must intimate the grounds in writing and provide a reasonable opportunity of being heard before rejecting the declared value. The authorities and Supreme Court precedents cited establish that transaction value supported by invoice, contract and bank realization cannot be discarded without cogent reasons, disclosure of the basis for rejection and an opportunity to rebut. On the facts, although the assessing authority had reason to doubt the declared value and relied on contemporaneous NIDB data to re-determine value, the basis and data used for adopting the contemporaneous price were not disclosed to the importer before reassessment; the importer was not given a transparent opportunity to contest whether the comparator imports were identical or similar within the meaning of the valuation rules; and the method of re-determination was not demonstrated to be consistent with the Valuation Rules.

Conclusion: The rejection of the declared transaction value and the re-determination of assessable value by reference to contemporaneous import prices was not sustained. The appellate order upholding the reassessment is set aside and the appeal is allowed in favour of the assessee.

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