Customs valuation cannot be rejected on unsigned foreign export photocopies without proving special circumstances.

Unsigned photocopies of foreign export declarations could not, by themselves, justify rejection of the declared transaction value for customs purposes. The presumption under Section 139(ii) of the Customs Act was unavailable because the covering communications from the foreign customs authorities were not on record, and the Revenue also failed to show enquiry with the manufacturers, evidence of additional foreign exchange remittance, or other special circumstances required under Rule 4(2) of the Customs Valuation Rules to discard the transaction value. The finding of undervaluation was therefore unsustainable, and the demand, confiscation, redemption fine and penalty were set aside.

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Issues: Whether the rejection of the declared transaction value and the consequential demand, confiscation, redemption fine and penalty were sustainable on the basis of unsigned photocopies of foreign export declarations and without establishing the special circumstances required to discard the declared value.

Analysis: The imported goods were valued on the basis of photocopies of export declarations said to have been filed before foreign customs authorities. Those documents were unsigned photocopies and the covering communications from the foreign customs authorities were not on record. In these circumstances, the presumption under Section 139(ii) of the Customs Act, 1962 was not available, and the declarations could not be relied upon to enhance value. The record also did not show enquiry with the manufacturers or any evidence of additional foreign exchange remittance, and the Revenue had not established the special circumstances necessary under Rule 4(2) of the Customs Valuation Rules to reject the transaction value.

Conclusion: The finding of undervaluation was unsustainable, and the demand, confiscation, redemption fine and penalty were set aside in favour of the appellants.

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