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;

(c) substitute values shall not be established under the provisions of clause (b) of this sub-rule.

(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.