Customs valuation and age-based import restriction: second-hand machinery confiscation sustained, but enhanced value was set aside.

Imported second-hand machinery was found, on inspection and expert evidence, to be more than ten years old, so the Exim policy restriction applied and confiscation and penalty were sustained. The importer's age certificate was rejected as unreliable because of factual discrepancies and the challenge to the expert committee's competence did not disturb the recorded findings. On valuation, the declared invoice value could be rejected only on legally sustainable grounds and any enhancement had to follow the Customs Valuation Rules; the record did not support the assessed value adopted below, so the enhancement was set aside. The appeal succeeded only on valuation, while the findings on age, confiscation, redemption fine, and penalty remained in force.

---

---

Issues: (i) whether the imported second-hand machines were more than ten years old so as to attract the restriction under the Exim policy and justify confiscation and penalty; (ii) whether the declared value of the machines could be rejected and the assessable value enhanced to Rs. 16 lakhs.

Issue (i): whether the imported second-hand machines were more than ten years old so as to attract the restriction under the Exim policy and justify confiscation and penalty.

Analysis: The age dispute was decided on the basis of the inspection of the machines, the condition of vital components, and the expert report obtained by the Customs authorities. The evidence showed that the machinery had old motors and other features indicating substantial age, while the certificate produced by the importer was found unreliable in view of the factual discrepancies noticed on examination. The challenge to the expert committee's competence did not dislodge the factual findings recorded after inspection.

Conclusion: The machines were held to be more than ten years old, import without licence was treated as contrary to the policy, and confiscation and penalty were upheld.

Issue (ii): whether the declared value of the machines could be rejected and the assessable value enhanced to Rs. 16 lakhs.

Analysis: The declared value could not be accepted as conclusive once the materials showed misdescription and the lower authorities had reappraised the goods. At the same time, rejection of transaction value had to be followed by a lawful re-determination under the Customs Valuation Rules, and the record did not disclose a proper quantification or a legally sustainable basis for fixing the enhanced value. The enhanced assessable value was therefore not supported by the adjudicatory record.

Conclusion: The enhancement of assessable value was set aside and the declared invoice value was not displaced in the manner adopted by the lower authorities.

Final Conclusion: The appeal succeeded only on the valuation question, while the findings on age, confiscation, redemption fine, and penalty remained in force.

Ratio Decidendi: A declared import value may be rejected only on legally sustainable grounds and any re-determination must be made in accordance with the Customs Valuation Rules; where the factual evidence supports the age-based restriction, confiscation and penalty may still be sustained.

---