Declared customs value cannot be rejected on quotations alone; contemporaneous import evidence is required to sustain enhancement and confiscation.

Declared customs value cannot be rejected or assessable value enhanced on the basis of quotations and complainant-supplied material alone, absent reliable contemporaneous import evidence or equivalent proof of undervaluation. The Department failed to establish deliberate under-valuation, so the valuation enhancement under the customs valuation framework was unsustainable. Because the alleged excess licence value depended entirely on that enhanced valuation, the basis for confiscation under import licence provisions also fell away. The confiscation and consequential penalty were therefore not sustainable, and the impugned order was set aside.

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Issues: (i) Whether the declared value of the imported goods could be rejected and the assessable value enhanced on the basis of quotations and complainant-supplied material without contemporaneous import evidence. (ii) Whether confiscation of the goods under the import licence provisions was justified when the alleged excess value arose only from the enhancement of assessable value.

Issue (i): Whether the declared value of the imported goods could be rejected and the assessable value enhanced on the basis of quotations and complainant-supplied material without contemporaneous import evidence.

Analysis: The Department rested its case substantially on material furnished by a rival complainant and did not independently establish undervaluation through contemporaneous imports or other collateral evidence available with Customs. A quotation, without proof of actual imports at or around the quoted price, was insufficient to displace the declared value. On the facts, deliberate under-valuation was not satisfactorily proved, and the valuation enhancement under the Customs valuation framework could not be sustained.

Conclusion: The issue is decided in favour of the assessee; rejection of the declared value and enhancement of assessable value were unjustified.

Issue (ii): Whether confiscation of the goods under the import licence provisions was justified when the alleged excess value arose only from the enhancement of assessable value.

Analysis: Once the enhancement of value was found unsustainable, the foundation for treating the import as unauthorised on the ground of excess licence value also disappeared. Confiscation based solely on the revised valuation, without an independent basis, was not proper.

Conclusion: The issue is decided in favour of the assessee; confiscation and consequential penalty could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal succeeded, as the Department failed to establish undervaluation and the consequential confiscation could not stand.

Ratio Decidendi: Rejection of declared customs value requires reliable contemporaneous evidence or equivalent proof of undervaluation, and a mere quotation or complainant's material is insufficient to justify enhancement and consequential confiscation.

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