Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 28.08.2025

Madras High Court held that valuation must be based on the “transaction value” as per Section 14 of the Customs Act ​ ​ ​ ​ ​ ​ ​

On December 17, 2021, the Hon’ble High Court of Madras delivered a significant judgment in the case of M/s. ​ IG International Private Limited vs. ​ The Deputy Commissioner of Customs & Others (W.P. ​ No. 6033 of 2020). ​ The case revolved around the legality of a Valuation Alert Notice issued by the customs authorities and its impact on the assessment of imported goods. ​ This judgment provides clarity on the scope of valuation alerts under the Customs Act, 1962, and their binding nature on importers and assessing officers.

Background of the Case

The petitioner, M/s. IG International Private Limited, challenged the Valuation Alert Notice dated May 8, 2017, issued by the customs authorities. ​ The petitioner argued that the valuation alert was contrary to Section 14 of the Customs Act, 1962, and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. ​ The petitioner contended that the alert interfered with the assessment process by mandating the use of benchmark prices, which forced them to pay higher customs duties on imported apples, a perishable commodity. ​

The petitioner further argued that the valuation alert was not binding on assessing officers and that the assessment should be based on the “transaction value” declared by the importer unless there were valid reasons to doubt its accuracy.

This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

Source: Madras High Court

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