Customs valuation turns on bona fide transaction value; higher comparable imports alone do not justify rejection of declared price.

A declared import price under customs valuation cannot be rejected merely because contemporaneous imports of the same goods were priced higher. Where the importer shows that the goods were obtained through a genuine Singapore trader arrangement, with bulk orders and direct dispatch from the manufacturer and the trader retaining its margin, the transaction is a bona fide commercial deal in the normal course of business. In the absence of material showing mala fides or other facts making the declared price unacceptable, the department must accept the transaction value and cannot enhance assessable value. On that basis, confiscation, redemption fine, and penalty were not sustainable.

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Issues: Whether the declared import price could be rejected and the assessable value enhanced merely because contemporaneous imports of the same goods from the same manufacturer were at a higher price, and whether the transaction value of goods routed through a trader in Singapore was liable to be accepted.

Analysis: The declared value cannot be discarded solely on the basis of a higher contemporaneous price. The importer produced evidence showing that the goods were procured through a Singapore trader who had bulked orders and arranged direct dispatch from the manufacturer, with the trader retaining its margin. The arrangement was treated as a genuine commercial transaction entered into in the normal course of business. In the absence of material showing mala fides or non-acceptability of the declared price, the higher contemporaneous value by itself was held insufficient to displace the transaction value. The view was reinforced by the principle that bona fide business reasons may justify a lower price and that the department must lay a factual basis for rejection of declared value.

Conclusion: The declared transaction value was required to be accepted, and the enhancement of value, confiscation, redemption fine, and penalty were not sustainable.

Ratio Decidendi: Under Rule 4 of the Customs Valuation Rules read with Section 14 of the Customs Act, a declared transaction value in a bona fide arms length commercial arrangement cannot be rejected merely because comparable imports were made at a higher price; rejection requires material showing that the declared value is unacceptable.

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