Declared invoice value cannot be rejected without proof of under-valuation; best judgment customs valuation failed here.

The declared invoice value of imported goods could not be rejected on mere inference of pre-importation services or a supposed nexus between parties; the Department had to prove with evidence that the price was not the real transaction value. Absence of proof of mutuality of interest, absence of evidence that the exporter incurred the alleged service-related expenditure, and lack of contemporaneous import data supporting enhancement meant valuation under Section 14(1)(b) and Rule 8 could not be invoked. The invoice value was therefore accepted as the assessable value, and the proposed loading was unjustified.

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Issues: Whether the invoice value of the imported goods could be rejected and loading made on the footing of alleged pre-importation services, and whether the Department had proved under-valuation so as to justify valuation under Section 14(1)(b) of the Customs Act, 1962 read with Rule 8 of the Customs Valuation Rules, 1963.

Analysis: The Department was required to establish with evidence that the declared invoice price was not the real transaction value and that the goods were under-valued. The finding of some relationship or nexus, without proof of mutuality of interest or proof that the exporter had incurred the alleged service-related expenditure, was not enough to discard the invoice value. The record did not show contemporaneous import evidence supporting the proposed enhancement, while the respondent had produced material indicating that similar imports by independent buyers were made at the same price. In these circumstances, the Department could not resort to best judgment valuation merely on inference or on alleged pre-import services.

Conclusion: The invoice value was rightly accepted as the assessable value, and the proposed loading was not justified.

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