Re-import valuation of rejected defective goods: original export price cannot be mechanically adopted without evidence of understatement.

On re-import of rejected and defective exported goods, ordinary valuation rules for first-time imports could not be mechanically applied to adopt the original export transaction value as the assessable value. The relevant consideration was the nature of the re-imported goods and whether the declared value was shown to be incorrect. As the Revenue produced no evidence that the re-import value was understated or that a higher value was warranted, the assessable value accepted by the appellate authority was upheld and the Revenue's objection was rejected.

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Issues: Whether, on re-import of rejected and defective exported goods, the assessable value could be determined by applying the valuation rules for first-time import and adopting the original export transaction value.

Analysis: The goods were admittedly re-imported after export and had been rejected by the foreign buyer as defective. In such a situation, the valuation principles applicable to ordinary first-time imports could not be mechanically applied to adopt the original export price as the assessable value. The Revenue produced no evidence to show that the declared value on re-import was understated or that a higher value was warranted.

Conclusion: The Revenue's contention was rejected and the assessable value as accepted by the Commissioner (Appeals) was upheld.

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