Transaction value in customs valuation cannot be rejected using a separate consignment price or an inapplicable rule.

Declared transaction value for an imported consignment had to be accepted where the statutory conditions for rejection under the Customs Act and the Customs Valuation Rules were not met. The higher price of another consignment imported under a different contract could not be used to substitute the declared value, especially where that price related to a renegotiated earlier contract and not to the subject import. The relevant valuation date was the date of importation, not the contract date. Rule 10A, which authorises rejection of transaction value, was not yet in force for a November 1997 import and therefore could not justify enhancement.

---

---

Issues: Whether the declared transaction value of the imported goods could be rejected and substituted with a higher value on the basis of another consignment imported under a different contract, and whether Rule 10A of the Customs Valuation Rules, 1988 could be invoked for a November 1997 import.

Analysis: The applicable valuation framework required acceptance of the transaction value only where the statutory conditions under Section 14 of the Customs Act, 1962 and Rule 4 of the Customs Valuation Rules, 1988 were satisfied. The relevant date for valuation was the date of importation and not the date of contract. However, the higher price of a contemporaneous consignment was linked to a renegotiated earlier contract and not to the subject fresh contract. The declared price for the subject consignment was also consistent with later imports at a lower rate. Further, Rule 10A, which permits rejection of transaction value, came into force only in February 1998 and could not govern a November 1997 import.

Conclusion: The declared transaction value had to be accepted and the enhancement made in the adjudication order was unsustainable.

Final Conclusion: The appeal succeeded and the assessee obtained consequential relief on acceptance of the declared value.

Ratio Decidendi: For imports governed by the pre-Rule 10A regime, transaction value must be assessed with reference to the statutory value on the date of importation, and it cannot be displaced by a higher price of a separate consignment under different contractual circumstances unless the legal basis for rejection of the declared value exists.

---