Customs Valuation (Determination of Price of Imported Goods) Rules, 1988

M/s Prodelin India (P) Ltd., a joint‑venture Indian company 75% owned by a U.S. firm, assembled VSAT antennas using components supplied by the foreign partner and paid a monthly technical service fee for post‑import activities such as training and design assistance. The Deputy Commissioner of Customs added 10% of the i…

ISPAT Industries Ltd imported iron ore pellets that were off‑loaded from the mother vessel at Bombay Floating Light (BFL) onto barges and taken to Dharamtar jetty. The Customs authorities added the barge transportation charges to the assessable value under Section 14 of the Customs Act, 1962, invoking Rule 9(2) of the …

Garden Silk Mills Ltd. and other importers brought several appeals challenging the Customs Department’s addition of landing charges to the CIF price of polyester yarn imported under CIF contracts for the purpose of determining assessable value under Section 14(1)(a) of the Customs Act, 1962. The appellants argued that …

M/s GMR Energy Ltd. imported hot‑section turbine parts under a Long‑Term Assured Parts Supply Agreement (LTAPSA) with GE USA, re‑exporting the used parts and paying customs duty on the invoice value. The Customs Commissioner, relying on Rules 4 and 9 of the Customs Valuation Rules, added one‑third of the invoice value,…

IndusInd Media & Communications Ltd imported a set of equipment for a cable TV "Head End" and declared the items individually under various tariff headings. The Customs Department alleged that the declaration was false, the goods were undervalued, and that software and related services, which were embedded in the equip…

The Steel Authority of India Ltd. (SAIL) imported plant equipment under two contracts that also included fees for basic design, engineering, and foreign supervision. The customs authorities added these fees to the assessable value of the equipment under Rule 9(1)(e) of the Customs Valuation Rules, 1988, treating the co…

The appellant, Rabindra Chandra Paul, imported two consignments of refined soybean oil from Bangladesh at a C&F price of Rs 24.50 per kg. The Customs Department, doubting the declared value, asked for a cost break‑up and later invoked Rule 7A of the Customs Valuation Rules, 1988, rejecting the raw‑material cost but acc…

The appellants, Indian public corporations engaged in manufacturing, imported technical drawings, designs and manuals from foreign collaborators on media such as paper and diskettes under technical collaboration agreements. The Customs Commissioner issued show‑cause notices under Section 28(1) of the Customs Act allegi…

The respondents imported Tape Deck Mechanisms (TDMs) from Yamato at a declared price of S$250 per set, whereas earlier orders with Mohan Impex were at S$343.45 per set. The Directorate of Revenue Intelligence seized the goods and the Collector of Customs found deliberate under‑invoicing, mis‑declaration of value and ev…

M/S Chaudhary Ship Breakers imported an old vessel under a Memorandum of Agreement (MOA) at a price of US$992,887.20. After inspection revealed corrosion, the parties executed an addendum reducing the price to US$929,388.60, which was reflected in the bill of entry. The Deputy Commissioner later assessed customs duty b…

M/s. Gira Enterprises imported cyanuric chloride from China, declaring a value of US$5,001 per metric ton. The Customs Commissioner, relying on a computer printout that allegedly showed other imports of the same chemical at US$1,950 per metric ton, reassessed the value to US$1,860 per metric ton under Rule 5 of the Cus…

M/s WEP Peripherals Ltd imported shuttles used in printers and paid a royalty/licence fee to the foreign supplier. The Customs adjudicating authority added the royalty fee to the customs value of the shuttles by using the peak price, ignoring that the importer had received a bulk order and had offered a price discount.…

The appellant, Commissioner of Customs, appealed against the Tribunal’s order that the royalty and licence fees payable under a technical assistance and trademark agreement (TAA) between M/s Ferodo India Pvt. Ltd. (the respondent) and its foreign licensor should be added to the customs value of imported raw materials. …

Essar Gujarat Ltd. purchased a Direct Reduction Iron Plant from Teviot Investments Ltd. and, as a pre‑condition, obtained a process licence and technical know‑how from Midrex and Yoest Alpine (V.A.). The Collector of Customs added the licence fee (DM 2,000,000) and a portion of the engineering and consultancy fees to t…

Aggarwal Industries Ltd. imported 500 metric tons of crude sunflower seed oil under a contract dated 26 June 2001 at US$435 per metric ton, but shipment was delayed until 5 August 2001. The Customs authority rejected the contract price as the transaction value, arguing that the international market price had risen shar…

The appellant, the Commissioner of Customs (Port) Chennai, appealed against the CESTAT order that excluded royalty and technical know‑how fees from the transaction value of capital goods imported by Mis. Toyota Kirloskar Motor Pvt. Ltd. for setting up an automobile plant. The dispute centered on whether such payments, …

The Commissioner of Customs issued a show‑cause notice to Indian Oil Corporation alleging that the company had misdeclared the value of imported petroleum products by including demurrage charges paid to ship owners. The Revenue demanded additional customs duty and penalty, but the Customs Excise and Gold (Control) Appe…

WIPRO Ltd., an importer of computer components, challenged the customs valuation rule that mandates adding 1% of the FOB value of goods as loading, unloading and handling charges even when the actual charges are known and ascertainable. The issue was whether the proviso (ii) to sub‑rule (2) of Rule 9(2) of the Customs …

Tata Iron and Steel Co. imported equipment and associated engineering documents under three contracts (MD 301 for documents, MD 302 for equipment, and an umbrella contract). The customs authority issued show‑cause notices alleging that the value of the engineering documents should be included in the customs value of th…

Mis Eicher Tractors Ltd imported a five‑year‑old stock of bearings from a Japanese vendor at a 77% discount and declared the price actually paid in its Bill of Entry. The Assistant Commissioner of Customs rejected the declared value, deeming the discount abnormal, and instead fixed the value using the vendor's price li…

Essar Steel Ltd. entered into a technical services agreement with Met Chem Canada Inc. to obtain consultancy for setting up a steel plant in India, and subsequently placed a purchase order for the plant and machinery. The Customs authority added the fee for the technical services (DM 78.95 million) to the customs value…

The Commissioner of Customs appealed against the judgment of the Customs, Excise & Service Tax Appellate Tribunal which had accepted M/s JD Orgochem Ltd.'s declared transaction value of US$13.2 per kg for imported dinitro crysazine, despite an earlier import at US$18.7 per kg. The assessing authority had rejected the d…

The importer South India Television Ltd. imported ceramic capacitors and diodes from Hong Kong and declared low invoice prices. The Customs Department issued a show‑cause notice alleging under‑invoicing and invoked Rule 8 of the Customs Valuation Rules to enhance the assessable value based on export declarations from t…

The Commissioner of Customs, Maharashtra, alleged that Galaxy Entertainment (I) Pvt. Ltd. undervalued a 20‑lane bowling alley imported from the USA by declaring a CIF price of US$15,000 per lane, whereas comparable imports were priced at US$30,000 per lane. The Department further claimed that a technical and installati…

Udayani Ship Breakers Ltd. purchased a ship that had been imported by another Indian company for ship‑breaking. The ship was damaged after arrival in India and was sold to the appellant on an "as is where is" basis for a reduced price of Rs 12.01 crore, whereas the original import price was Rs 24.78 crore. The appellan…

The Directorate of Revenue Intelligence alleged that M/s Ganpati Overseas under‑invoiced imported tuners and saw‑filters from Hong Kong, evading customs duty. The department relied on unattested photocopies of the supplier's initial export declarations and statements recorded under Section 108, which were later retract…

The Collector of Customs appealed against the CEGAT order that had accepted the importer’s declared price for zip rolls as the transaction value despite the importer’s forged certificate of North Korean origin. The Supreme Court held that Rules 3 and 4 of the Customs Valuation Rules presume a genuine transaction value …

Varsha Plastics Pvt. Ltd. imported a consignment of LDPE/HDPE granules from the United States and declared a low invoice price. The Customs Authority rejected the transaction value as unrealistically low, enhanced the valuation using prices from foreign journals as directed by Standing Order No. 7493/99, confiscated th…

Mangalore Refineries & Petrochemicals Ltd imported crude oil in 144 voyages between 1996 and 1998. The Revenue, via a show‑cause notice, demanded customs duty on the basis of the quantity shown in the bills of lading, arguing that the duty was now ad valorem and therefore should be calculated on the invoice price. The …

Coal India Ltd., through its subsidiary Central Coalfields Ltd., imported spare parts for P&H shovels and was required to pay an additional 8% of the FOB value to the Indian agent Voltas Ltd. as engineering and technical service fees. The customs authorities held that these fees were part of the assessable value under …

The exporter, Mis Siddachalam Exports Pvt. Ltd., claimed a duty drawback on garments exported at declared FOB values of Rs. 390‑417 per piece, but the customs authorities alleged the values were inflated and seized the goods. A market valuation report from M/s Skipper International, later retracted, was used by the rev…