Invoice value cannot be displaced by an unrelated quotation; reassessment and penalties fail without reliable proof of undervaluation.

Invoice value could not be rejected and substituted with a quotation for a different, larger system where the revenue produced no reliable contemporaneous evidence of undervaluation. The quotation was itself treated as unacceptable and did not match the imported components, so it could not support reassessment of assessable value. In the absence of proof of clandestine payment, relationship, or any material showing that the invoice price was unreal, the reassessment was unsustainable. Confiscation, redemption fine, and penalties were therefore set aside.

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Issues: Whether the assessable value of the imported goods could be rejected and reassessed on the basis of a quotation for a different and larger system, and whether the consequent confiscation and penalties could stand.

Analysis: The department had rejected the invoice value without reliable contemporaneous evidence of undervaluation. The quotation relied upon was itself treated as unacceptable, yet it was still used selectively for valuation. The quotation related to the entire digital recording system, while the import was only of certain components. The valuation adopted therefore did not correspond to the goods actually imported. In the absence of proof of clandestine payment, relationship, or any material showing that the invoice price was not the real price, the invoice value could not be displaced by the impugned quotation. The reassessment based on that quotation was consequently unsustainable.

Conclusion: The reassessment of value, confiscation, redemption fine, and penalties were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because the valuation adopted by the authorities was unsupported by proper evidence and was based on an erroneous use of a quotation unrelated to the imported goods.

Ratio Decidendi: Where the revenue fails to prove undervaluation by reliable evidence, invoice value cannot be rejected and substituted by an inapposite quotation, especially when the quotation relates to a different article or a larger system than the goods actually imported.

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