Transaction value in customs valuation cannot be rejected without evidence of statutory grounds and a valid comparable import price.

Declared transaction value is the primary basis of customs valuation and may be rejected only if the statutory grounds under the valuation rules are proved by evidence. Here, no material showed any restriction, extra remittance, or other reason to treat the declared price as unacceptable, so recourse to a higher contemporaneous import price was not justified. A comparison with another invoice was also inadequate because the imports were in widely different quantities, whereas identical-goods comparison requires substantially the same quantity and commercial level. The declared transaction value therefore had to be accepted.

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Issues: Whether the declared transaction value of the imported goods could be rejected and the assessable value fixed on the basis of a higher contemporaneous import value.

Analysis: Rule 3 made transaction value the primary basis of valuation, and recourse to the sequential methods in Rules 5 to 8 was permissible only where the transaction value could not be determined. Rule 4 allowed rejection of transaction value only where the restrictions in sub-rule (2) were shown to apply. No evidence was produced to establish any such restriction, any extra remittance, or any other material showing that the declared price was unacceptable. The relied-upon comparison was also weak because the imports were in widely different quantities, whereas Rule 5 requires identical goods at the same commercial level and in substantially the same quantity. Mere comparison of two invoices, without more, was insufficient to establish undervaluation.

Conclusion: The declared transaction value was required to be accepted and the reassessment based on the contemporaneous import was not justified; the issue is decided in favour of the assessee.

Ratio Decidendi: Transaction value cannot be discarded and substituted by a contemporaneous import price unless the statutory grounds for rejection are established by evidence, and a valid comparison for identical goods must satisfy the requirement of substantially the same quantity and commercial level.

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