Customs valuation must follow contemporaneous import prices, not contract price alone, and unsupported premium additions were rejected.

Customs valuation of imported goods must be determined by reference to the legally relevant date of importation and contemporaneous import prices, rather than by adopting the contract price alone. Premium components said to cover freight, insurance, incidental charges and profit on premium were not accepted as part of assessable value on the stated facts. The valuation order was set aside and the matter remitted for fresh determination in accordance with law after disclosure of contemporaneous import details and opportunity to rebut them.

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Issues: (i) Whether the assessable value of imported goods was to be fixed on the basis of the contract price or with reference to contemporaneous imports and the date of importation; (ii) whether the amount described as premium on account of freight, insurance, incidental charges and profit on premium could be included in the assessable value.

Issue (i): Whether the assessable value of imported goods was to be fixed on the basis of the contract price or with reference to contemporaneous imports and the date of importation.

Analysis: The valuation of imported goods was held to have to be determined with reference to the legally relevant date of importation and in the light of contemporaneous import prices, not merely by adopting the contract price between the buyer and seller. The matter was therefore required to be reconsidered after communication of the details of contemporaneous imports and after granting opportunity to rebut them.

Conclusion: The contract price was not accepted as the sole basis of assessable value; reassessment on the basis of contemporaneous import data was directed.

Issue (ii): Whether the amount described as premium on account of freight, insurance, incidental charges and profit on premium could be included in the assessable value.

Analysis: The Tribunal found no clear basis for treating the stated premium components as part of assessable value. It held that incidental charges and profit on premium should not form part of the assessable value, and that CIF value had to be determined in accordance with valuation principles and contemporaneous import prices or otherwise under the governing law.

Conclusion: The inclusion of the stated premium components in assessable value was rejected.

Final Conclusion: The impugned valuation order was set aside and the matter was sent back for fresh determination according to law, with the department's challenge substantially accepted.

Ratio Decidendi: For customs valuation, assessable value must be determined on the legally relevant import date with reference to contemporaneous import prices and applicable valuation principles, and not merely by adopting the contract price or unsupported premium additions.

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