Declared transaction value must be accepted when invoice evidence stands unrebutted and extraneous valuation material is ignored.

Declared transaction value of an imported assorted stock lot could not be rejected where the importer's manufacturer invoice was not disproved by reliable evidence. Valuation based on raw material cost was inappropriate for goods with visual manufacturing defects, and reliance on extraneous website information not included in the show-cause notice breached natural justice. The declared value was therefore required to be accepted under Rule 4 of the Customs (Valuation) Rules, 1988, and the resulting enhancement, confiscation, redemption fine and penalty were unsustainable.

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Issues: Whether the declared transaction value of the imported stock lot could be rejected and enhanced on the basis of raw material cost and extraneous website information, and whether the resulting confiscation and penalties were sustainable.

Analysis: The adjudicating authority had gone beyond the show cause notice by relying on website information that was not part of the case against the importer, which offended principles of natural justice. The goods were admittedly assorted stock lot with visual manufacturing defects, so valuation by reference to raw material cost was inappropriate. There was also no substantial evidence to reject the manufacturer's invoice produced in support of the declared price. In these circumstances, the declared transaction value was required to be accepted under Rule 4 of the Customs (Valuation) Rules, 1988, and the enhancement of value could not be sustained.

Conclusion: The enhancement of value and the consequential confiscation, redemption fine, and penalty were unsustainable, and the appeal succeeded.

Final Conclusion: The order of the lower authority was set aside because the declared transaction value could not be displaced on the facts and the impugned valuation exercise was legally unsound.

Ratio Decidendi: In the absence of reliable evidence to reject the manufacturer's invoice, the declared transaction value of imported goods must be accepted, and valuation cannot be enhanced on the basis of extraneous material or raw material cost contrary to the valuation rules.

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