Customs valuation follows genuine transaction value for imported used cars, but post-import depreciation for clearance delay is not allowed.

Customs valuation of a second-hand imported car followed the declared transaction value because the sale was genuine, involved an unrelated seller, and no recognised exception justified rejecting the invoice price. Post-import depreciation for delay in customs clearance was impermissible because valuation under the Customs Act must be based on the price at the time of importation, and hardship from detention does not alter that statutory basis. The assessment therefore proceeded on the declared transaction value without allowance for depreciation after import.

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Issues: (i) whether the transaction value of a second-hand imported car could be accepted for customs valuation; (ii) whether depreciation could be granted for delay in customs clearance after importation.

Issue (i): Whether the transaction value of a second-hand imported car could be accepted for customs valuation.

Analysis: The sale was found to be a genuine commercial transaction with an unrelated seller, and the surrounding facts supported the price declared. Transaction value is the normal basis of valuation under the Customs Valuation Rules, and departure from it is permissible only in recognised exceptional cases. On the facts, there was no legal basis to reject the invoice value merely because the goods were second-hand.

Conclusion: The transaction value was rightly accepted and that part of the Revenue's challenge failed.

Issue (ii): Whether depreciation could be granted for delay in customs clearance after importation.

Analysis: Section 14 of the Customs Act requires valuation with reference to the price at the time of importation. Although the goods may lose value during prolonged detention, the statute does not authorise post-import depreciation on account of delay in clearance. The legal basis for valuation cannot be altered by hardship arising from delay.

Conclusion: Grant of depreciation for the post-import period was impermissible and was set aside.

Final Conclusion: The assessment was to proceed on the declared transaction value, but without allowance of depreciation for the period after importation.

Ratio Decidendi: Customs valuation normally follows the transaction value for a genuine unrelated-party sale, while depreciation cannot be allowed for delay after importation because valuation must be anchored to the price at the time of import.

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