Often the appraising officers value consignments higher than the invoice value. In effect, the appraisers reject the transaction value under Rule 4, the basic rule for valuation of imported goods.
Though the possibility is there for under valuation, the valuation rules given by the World Customs Organisation are supposed to be followed in spirit and letter by the Customs department in all countries.
But judging from the number of judgments on this issue, it is clear that the revenue department is rejecting the transaction value over enthusiastically leading to many of their decisions being set aside.
Two recent decisions are in the cases of the revenue department taking prices of a tiny consignment for comparison with a big consignment (Kailash Enterprises vs Customs Commissioner, 2003 (155) 548 tribunal) and rejecting a negotiated price without any apparent reason. (AK Jewellers vs Customs Commissioner, 2003 (155) ELT 585 tribunal (lager Bench))
The revenue department has often been neglecting the law that has been well established that transaction value under Rule 4 cannot be rejected unless there is flow back of money from buyer to seller or unless they are related or such other conditions given in Rule 4 itself (PAC Systems 1992 (58) ELT 131 tribunal).
There are a number of other decisions, which have laid down the law that the transaction value given in a genuine invoice cannot be rejected in favour of a price list or a deemed value.
In the Sawhney Export Ho-use case, 1992(60) ELT 327 tribunal, where the depar-tment sought to reject the transaction value and determine the value on the basis of price list, the tribunal rejected the department
