Customs valuation of old machinery cannot be rejected on engineer certificates alone; confiscation for licence breach remained valid.

For old and used photocopier machines, declared transaction value under customs valuation could not be rejected merely on Chartered Engineer certificates or NIDB data where there was no evidence of related-party dealings, extra consideration, or other tangible grounds under the Customs Valuation Rules, 2007. The valuation of obsolete second-hand machinery must be tested on age, condition, and marketability, not generalized comparable data alone. In contrast, import of restricted photocopiers without the required licence justified confiscation, but redemption fine and penalty had to be fixed on the facts and supporting evidence; absent proof of higher profit margin, the higher adjudicated amounts were reduced.

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Issues: (i) whether the declared transaction value of old and used photocopier machines could be rejected and enhanced on the basis of Chartered Engineer certificates and NIDB data; (ii) whether the confiscation, redemption fine and penalty imposed for import without licence and alleged misdeclaration required interference.

Issue (i): whether the declared transaction value of old and used photocopier machines could be rejected and enhanced on the basis of Chartered Engineer certificates and NIDB data

Analysis: The goods were old, used and obsolete models, and the record itself showed that market inquiry indicated discontinuance of manufacture. For valuation under Section 14 of the Customs Act, 1962, the transaction value is the starting point and can be rejected only on legally sustainable grounds, supported by tangible evidence and proper inquiry under the Customs Valuation Rules, 2007. The Department did not establish that the buyer and seller were related, did not show any extra payment, and relied mainly on successive Chartered Engineer opinions and NIDB data, which were held insufficient for these circumstances. The valuation of second-hand obsolete machinery depends on age, condition and marketability, so comparable contemporaneous import data was not a reliable basis on these facts.

Conclusion: The declared transaction value could not be rejected, and the enhancement was unsustainable.

Issue (ii): whether the confiscation, redemption fine and penalty imposed for import without licence and alleged misdeclaration required interference

Analysis: The import was of restricted old and used photocopiers without the necessary licence, and confiscation on that ground was maintained. However, the quantum of redemption fine and penalty had to be assessed on the facts of the case and with regard to the nature of the goods and the absence of evidence showing a higher profit margin. The record did not justify the higher amounts fixed by the adjudicating authority, and the reduced figures adopted in comparable matters were found to be appropriate on the facts.

Conclusion: Confiscation was upheld, while the redemption fine and penalty were reduced to 10% and 5% of the value of the goods respectively.

Final Conclusion: The appeal succeeded on valuation, failed on confiscability, and resulted in a reduction of the monetary consequences attached to the import violation.

Ratio Decidendi: In the absence of tangible evidence displacing the declared price, the transaction value of imported goods cannot be rejected merely on Chartered Engineer estimates or generalized data, and the quantum of redemption fine and penalty must be fixed on the facts of the case with supporting evidence of profit margin.

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