Discuss valuation rules under section 14 of the Customs Act, 1962. In this context discuss method of valuation on the basis of identical goods and similar goods.

The value which is calculated for determination of customs duty as per section 14 of Customs Act, 1962 is known as customs value or assessable value. While deciding the assessable value following points are kept in mind: The price should be normal price at which such goods are ordinarily offered for sale. Price should be in the course of international trade. Buyer and Seller should not be related parties. Price should be the sole consideration for sale. In case of imports rate of exchange will be as notified by CBIC as on the date when the Bill of Entry is presented and in the case of exports the rate on the date of clearance order by the competent authority. As per Rule 10 price paid or payable for delivery in the case of imports i.e. C.I.F. value is taken as transaction value and in the case of exports F.O.B. value is taken as assessable value. Freight is taken either actual or 20% of F.O.B. whichever is less and insurance to be taken is either actual or 1.125% of F.O.B. whichever is less. Transaction value is calculated by value of identical goods and also by value of similar goods, if required. Identical goods as per Rule 4 are such goods which are basically of the same quality as the goods being valued. If there are more than one identical goods the lowest will be taken for assessment purposes. On the other hand, similar goods mean not identical but of the same characteristics produced by the same Country. Rule 5 is applicable for valuation on the basis of similar goods.