Valuation of old imported machinery permits rejection of declared value when surrounding facts undermine reliability and valuation evidence is selective.

Declared transaction value of old and used imported machinery may be rejected where surrounding circumstances create genuine doubt about correctness, including inconsistency with certified age, residual life, working condition and technology, and where the invoice originates from a scrap dealer rather than the original user or manufacturer. In such cases, reassessment under Rule 8 may be applied if earlier valuation methods are unworkable. A Chartered Engineer's certificate need not be accepted as an indivisible whole: factual findings on manufacture and condition may be relied on, while an unsupported opinion on value may be rejected. The reassessed value was upheld and the enhanced assessable value restored.

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Issues: Whether the declared transaction value of old and used imported machinery could be rejected and the assessable value re-determined on the basis of depreciation and other surrounding circumstances, and whether the Chartered Engineer's certificate had to be accepted in full.

Analysis: The imported goods were old and used machinery, and the declared value appeared inconsistent with the certified age, residual life, working condition, and technology of the equipment. The invoice was from a scrap dealer rather than the original manufacturer or prior user, creating genuine doubt about the correctness of the declared value. In such circumstances, the declared value could be rejected under the valuation rules and Rule 8 could be applied where the earlier methods were not workable. The certificate of the Chartered Engineer was not required to be accepted as an indivisible whole: the factual portions regarding manufacture and condition could be relied upon, while the opinion on value could be rejected if it was not convincing. The valuation method adopted by the department was consistent with the Board's circular on old and used capital goods.

Conclusion: The declared value was rightly rejected and the reassessed value was upheld; the Revenue's appeal succeeded.

Final Conclusion: The order of the Commissioner (Appeals) was set aside and the adjudication order sustaining the enhanced assessable value was restored.

Ratio Decidendi: In valuation of old and used imported machinery, the declared transaction value may be rejected where surrounding circumstances create genuine doubt, and a technical certificate may be relied upon selectively for facts but not for an unsupported opinion on value.

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