Uniform customs valuation required for second-hand machinery; selective adoption of the higher value is impermissible and remand follows.

Customs valuation of second-hand imported machinery must be applied on a uniform basis across all parts, components and sub-assemblies; the Department cannot mix valuation methods or selectively adopt the higher of two alternative values for customs purposes. The declared value, supported by a Chartered Engineer's certificate and broadly confirmed by SGS India, was examined under the Customs Valuation Rules, 1988, and the depreciation method was not rejected in principle, but it had to be used consistently. The impugned order was set aside and the matter remanded for fresh determination in accordance with law on a single consistent valuation method.

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Issues: Whether the customs valuation of second-hand imported machinery could be sustained when the Department sought to apply different valuation approaches to different components and whether the matter required remand for fresh determination.

Analysis: The valuation of the imported second-hand machinery was examined in the context of the Customs Valuation Rules, 1988. The declared value had been supported by a Chartered Engineer's certificate and broadly confirmed by SGS India, with only minor variation. The Department's approach of invoking the depreciation method was not rejected in principle, but the valuation method had to be applied consistently across all parts, components and sub-assemblies of the machinery. Rule 8(2)(ii) bars a system that accepts, for customs purposes, the higher of two alternative values. The same principle was reinforced by the cited authorities that two different yardsticks cannot be applied selectively to the same goods.

Conclusion: The Department could not mix valuation methods by accepting the higher value selectively; it had to adopt one uniform method consistently. The impugned order was set aside and the matter was remanded for fresh consideration in accordance with law.

Final Conclusion: The appeal succeeded to the extent of obtaining a remand, with the valuation issue left to be decided afresh by the original adjudicating authority on a uniform legal basis.

Ratio Decidendi: In customs valuation, a single method must be applied consistently to the entire consignment, and the higher of two alternative values cannot be selectively adopted for customs purposes.

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