Genuine pre-shipment price reduction bars rejection of invoice value where later document amendments are only consequential.

Where a genuine reduction in price is communicated by the supplier's agent before shipment and reflects a market-driven change, the invoice value cannot be rejected merely because the purchase order and letter of credit were amended later. The record showed no evidence that the reduction was fictitious, manipulated, or procured by the importer; the later banking-document amendment was only a consequential step. On those facts, the customs authority was not justified in enhancing the assessable value, and the invoice price had to be accepted.

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Issues: Whether the declared invoice price could be rejected and the assessable value enhanced on the ground that the purchase order and letter of credit were amended after shipment, when the supplier's agent had informed the importer of the reduced price before shipment.

Analysis: The reduced price was communicated by the supplier's agent before shipment and the facts showed that the price cut was made in response to a fall in international market prices. The amendment to the purchase order was made on the same day as the communication and the alteration of the letter of credit was only a later consequential step. There was no material to show that the reduction was fictitious, manipulated, or made at the importer's instance. In these circumstances, the invoice price represented the genuine agreed price and could not be discarded merely because one supporting banking document was amended later.

Conclusion: The enhancement of the assessable value was unjustified and the invoice price was required to be accepted.

Final Conclusion: The order enhancing the value was set aside and the appeal was allowed.

Ratio Decidendi: Where a genuine price reduction is communicated and agreed before shipment, and there is no evidence of manipulation, the customs authority cannot reject the invoice price merely because consequential documentary amendments were completed later.

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