Customs valuation rules require sequential assessment; invoice value for imported components could not be replaced by ad hoc market pricing.

Invoice value for imported umbrella-frame components could not be rejected on the basis of a quotation and a backward calculation from the local selling price of complete umbrellas. The assessable value had to be determined under the prescribed sequential valuation method in the Customs Valuation Rules, 1988, and an ad hoc market-based approximation was impermissible. The record also did not show contemporaneous imports at the quoted price or any special relationship affecting the declared transaction value, and the sales confirmations supported the invoices. On that material, the declared transaction value could not be discarded.

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Issues: Whether the invoice value of imported umbrella-frame components could be rejected and the assessable value enhanced on the basis of a quotation and a market-derived working, without following the prescribed valuation sequence under the customs valuation rules.

Analysis: The department's enhancement was founded on a quotation, but the final adjudication did not adopt that quotation as the transaction value. Instead, the assessable value was arrived at by taking the local selling price of a complete umbrella and working backwards to the value of the imported components. That approach was inconsistent with the sequential method required under the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. There was also no evidence of contemporaneous imports at the quoted prices sufficient to displace the invoice price. The imported goods were supported by sales confirmations, and the record did not establish that any special relationship between buyer and seller had influenced the declared price. In such circumstances, the rejection of the declared invoice value required firmer legal and evidentiary footing than was present in the order.

Conclusion: The rejection of the invoice value was not sustainable and the declared transaction value could not be discarded on the material before the authority.

Ratio Decidendi: Invoice value may be rejected only on legally sustainable grounds supported by evidence, and assessable value must be determined in accordance with the prescribed sequential valuation rules rather than by an ad hoc market-based approximation.

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