Declared transaction value for second-hand machinery upheld where customs had no valid evidence to reject the importer's valuation.

Declared transaction value for imported second-hand machinery cannot be rejected or enhanced merely by reference to contemporaneous imports. Where the importer supports the declared price with a Chartered Engineer's certificate and there is no contrary local examination or other valid evidence to displace that valuation, the customs authority must accept the declared value for assessment. On that basis, enhancement of assessable value was unjustified, and the penalty founded on the enhancement also failed. The assessment was therefore directed to proceed on the declared value without the impugned addition or penalty.

---

---

Issues: Whether the declared transaction value of the imported second-hand machinery could be rejected and the assessable value enhanced on the basis of contemporaneous imports, and whether the penalty imposed on that basis was sustainable.

Analysis: The importer produced a Chartered Engineer's certificate supporting the declared value, and there was no local examination by any Chartered Engineer to discredit it. The certificate and subsequent clarification showed that the declared price was in line with the estimated value, and the stated higher figure related to the price of a new machine in the year of import. In the absence of valid reasons to discard the declared value, the enhancement of value was not justified. Since the enhancement itself was unsustainable, the penalty founded on that enhancement also could not stand.

Conclusion: The declared transaction value was accepted for assessment purposes. The enhancement of value and the penalty were set aside in favour of the assessee.

Final Conclusion: The importer succeeded, and the assessment was directed to proceed on the declared value without the impugned enhancement or penalty.

Ratio Decidendi: Declared transaction value cannot be rejected, and assessable value cannot be enhanced, unless the customs authority records valid reasons supported by evidence that displace the importer's valuation.

---