Customs Valuation (Determination of value of Imported goods) Rules, 2007 › Customs Valuation (Determination of value of Imported goods) Rules, 2007

Rule 3. Determination of the method of valuation

Customs Valuation (Determination of value of Imported goods) Rules, 2007

Official text

Rule 3. Determination of the method of valuation. —

(1) Subject to rule 12, the value of imported goods shall be the transaction value adjusted in accordance with provisions of rule 10;

(2) Value of imported goods under sub-rule (1) shall be accepted:

Provided that -

(a) there are no restrictions as to the disposition or use of the goods by the buyer other than restrictions which -

(i) are imposed or required by law or by the public authorities in India; or

(ii) limit the geographical area in which the goods may be resold; or

(iii) do not substantially affect the value of the goods;

(b) the sale or price is not subject to some condition or consideration for which a value cannot be determined in respect of the goods being valued;

(c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and

(d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below.

(3) (a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price.

(b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time.

(i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India;

(ii) the deductive value for identical goods or similar goods;

(iii) the computed value for identical goods or similar goods:

Provided that in applying the values used for comparison, due account shall be taken of demonstrated difference in commercial levels, quantity levels, adjustments in accordance with the provisions of rule 10 and cost incurred by the seller in sales in which he and the buyer are not related;

(4) if the value cannot be determined under the provisions of sub-rule (1), the value shall be determined by proceeding sequentially through rule 4 to 9.

Judgments on Rule 3

Sterling Meta Plast India Pvt Ltd vs -Kolkata(Admn Airport) — CESTAT, 26 May 2026. Franchise fees/royalties paid to a brand licensor for post-importation rights of sale and distribution, and AMP expenses or corporate marketing fees incurred for the importer's own Indian business, are not includible in…
Mahesh Agarwal Partner vs Cc Sea Ch - Ii — CESTAT, 13 Mar 2026. Where higher-value parallel documents are recovered from the importer's own possession and corroborated by voluntary Section 108 admissions and extra-commercial payments, declared transaction value may be rejected, the…
Mukesh Kumar vs Commissioner Of Customs (Ii), Chennai — CESTAT, 17 Feb 2026. Penalties under sections 112(b) and 114AA of the Customs Act can be imposed only where mens rea or active involvement is established, and retracted statements recorded u/s 108 cannot sustain duty demands unless tested…
Commissioner Of Customs Import 1 Zone 1 vs M/S Essar Bulk Terminal Salaya Limited — CESTAT, 3 Apr 2025. Alleged overvaluation without duty consequence cannot sustain confiscation under section 111(m) or penalties under sections 112/114AA, and the price of goods for export to a country other than India is expressly barred…
Ms Kseg India International vs Ce & Cgst Noida — CESTAT, 18 Jul 2024. Enhancement of the value of imported goods based on a DGOV circular, without rejecting the declared value under Rule 12 and applying the Valuation Rules sequentially from Rule 4 onwards, is unsustainable, and goods that…
Valeo Friction Materials India Ltd vs Chennai( Port Import) — CESTAT, 31 May 2024. Royalty or licence fee paid for technical know-how for manufacture of finished products, and not as a condition of sale of the imported goods, is not includible in the transaction value of the imported raw materials,…
Cisco Commerce India Private Limited vs Commissioner Of Customs — CESTAT, 19 Oct 2022. Once the SVB has accepted a related-party transaction value under Rule 3(3)(a), the department cannot load value on the basis of the importer's own earlier higher-priced imports treated as 'contemporaneous', and any…
M/S.N.C.Alexender vs The Commissioner Of Customs — Madras High Court, 9 Jun 2022. Show cause notices and adjudication orders issued by DRI officers are valid because they are appointed as 'Officers of Customs' under Section 4 of the Customs Act, 1962, and Section 97 of the Finance Act, 2022…
Century Metal Recycling Pvt. Ltd. vs Union Of India — Supreme Court of India, 17 May 2019. The declared transaction value in a bill of entry cannot be rejected unless the proper officer has reasonable doubt as to its truth or accuracy supported by 'certain reasons' and contemporaneous corroborative material,…
M/S Vaibhav International vs The Commissioner Of Customs — Karnataka High Court, 9 Mar 2026. No show cause notice can be issued under Section 28(4) of the Customs Act while assessment remains provisional under Section 18, since the 'relevant date' under Explanation 1(b) to Section 28 runs only from adjustment…
M/S. Walchand Nagar Industries Ltd vs The Commissioner Of Customs — Madras High Court, 3 Dec 2025. Goods whose value declared in the Bill of Entry does not correspond to the proper assessable value are liable to confiscation under Section 111(m), and where the undervaluation is admitted, penalty under Section 112(a)…
M/S Lulu International Shopping Malls Pvt Ltd vs Central Board Of Indirect Taxes And… — CESTAT, 2 Jun 2025. Classification of goods is a matter relating to chargeability and the burden of proof lies squarely upon the Revenue, which must adduce proper evidence and apply the General Rules for Interpretation of the Tariff before…
Polyglass Acrylic Manufacturing Co Pvt Ltd vs The Additional Director General Through The Director Directorate Of Revenue Intelligence — Delhi High Court, 10 Jan 2025. A show cause notice under Section 28 of the Customs Act that is not adjudicated within the prescribed period lapses and cannot be adjudicated, and repeated placement of the matter in the 'call book' is not a valid…
Commissioner, Customs… vs Cmr Nikkei India Pvt Ltd — CESTAT, 21 Oct 2024. Under rule 9 of the Customs Valuation Rules, 2007, the value of imported goods may be re-determined with reasonable flexibility (including reliance on NIDB data of contemporaneous imports irrespective of country of…
Ms Puma Sports India Pvt Ltd vs Commissioner Of Customs-Mumbai Adj — CESTAT, 19 Aug 2024. An addition to assessable value under rule 10 of the Customs Valuation Rules, 2007 can stand only on a specific finding that the payment was a condition of sale of the imported goods, with the initial onus of…
Cadila Healthcare Ltd vs Vadodara-I — CESTAT, 4 Dec 2023. Where an EOU makes full and regular disclosures of its DTA clearances to the authorities, the value must be determined in accordance with Section 14 of the Customs Act and the Customs Valuation Rules, 2007 (including…
Victor Reinz India Pvt. Ltd vs Commissioner Of Customs (Import)… — Bombay High Court, 8 Aug 2023. Where an appellate order contains a finding on merits against an assessee and the matter is remanded only for a limited purpose such as re-quantification of duty, the Tribunal cannot refuse to decide the appeal on…
Sachin Kshirsagar vs Commissioner Of Customs — CESTAT, 9 Jun 2022. A claim to an exemption benefit does not by itself establish intent to evade duty, and penalties on individuals cannot be sustained where the classification issue is contentious and their role in the alleged…
M/S. Millions Fashion vs The Customs — Madras High Court, 19 Feb 2020. A settlement applicant under Section 127B must maintain a clear and consistent stand on its admitted liability, and where the Settlement Commission rejects an application solely because of an unexplained change of…