Customs valuation of imported machinery must rest on proper comparison of identical goods, not a bare presumption of undervaluation.

Customs valuation of imported machinery cannot be enhanced merely because another import of similar goods was assessed at a higher price. Reliance on the value of identical goods requires a proper comparison of commercial level and substantially the same quantity under the Customs Valuation Rules, 1988. Where that analysis is not undertaken, a negotiated price, long-standing customer relationship and quantity-based discount cannot be disregarded on a bare presumption of undervaluation. The declared invoice value was therefore to be accepted and the proposed loading of value was unjustified.

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Issues: Whether the customs authorities were justified in loading the declared invoice value of the imported machinery by relying on the price of an allegedly identical import under Rule 5(1)(b) of the Customs Valuation Rules, 1988.

Analysis: The declared price could not be ignored merely because a different import of similar machinery had been valued at a higher figure. For reliance on the value of identical goods, the authority had to examine whether the comparable import was at the same commercial level and in substantially the same quantity. That examination was not undertaken. The circumstances relied upon by the importer, including negotiated price, long-standing customer relationship, and quantity-based discount, could not be disregarded without such analysis. The departmental presumption of undervaluation was therefore unsustainable.

Conclusion: The loading of the declared value was unjustified and the price shown in the invoice was to be accepted according to law.

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