Customs transaction value cannot be rejected on suspicion without corroborated evidence of undervaluation or contemporaneous higher imports.

Under Section 14 of the Customs Act and Rule 4 of the Customs Valuation Rules, the declared transaction value is ordinarily to be accepted unless reliable material shows undervaluation or that the transaction was not in the normal course of business. A third-party paper and statements, without proof that the person was the importer's agent or that the document related to the disputed consignment, were insufficient. In the absence of independent evidence of contemporaneous higher imports, the declared value could not be rejected on suspicion. The valuation enhancement was therefore unsustainable and was set aside in favour of the assessee.

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Issues: Whether the declared transaction value of the imported goods could be rejected and the assessable value re-determined on the basis of a third party document and statements, in the absence of corroborative evidence of under-valuation or contemporaneous higher imports.

Analysis: Under Section 14 of the Customs Act and Rule 4 of the Customs Valuation Rules, the declared transaction value is ordinarily to be accepted unless reliable material shows that it is not genuine or was not entered into in the normal course of business. The only material relied upon was a paper recovered from the premises of an associate of the importer and statements recorded from that person. The record did not establish that the person was acting as the importer's agent or that the paper directly related to the disputed consignment. The statements also did not conclusively connect the alleged lower valuation to this import. No independent evidence of contemporaneous imports at higher values was produced, and the material fell short of establishing that the declared value was bogus on a preponderance of probability.

Conclusion: The rejection of the declared transaction value was unsustainable and the valuation enhancement was set aside in favour of the assessee.

Ratio Decidendi: A declared customs transaction value cannot be discarded on suspicion or on uncorroborated third-party material; the department must establish, on a preponderance of probability, reliable evidence of undervaluation or comparable higher contemporaneous imports.

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