Customs valuation of related-party imports upheld under residual method, with misdeclaration, confiscation and penalty sustained.

The declared invoice value of imported second-hand capital goods was rejected because it was not the real transaction value: the importer and foreign supplier were related, the goods were shown at a notional value, and the customs copy did not reflect the actual invoice value. In the absence of reliable identical or similar goods data, valuation was determined sequentially and the residual method under Rule 8 was applied on the basis of the Chartered Engineer's assessment. The finding of misdeclaration was upheld, so confiscation and penalty were sustained.

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Issues: Whether the declared value of the imported second-hand capital goods could be rejected and assessed under the residual valuation method, and whether the findings of misdeclaration, confiscation and penalty were sustainable.

Analysis: The declared invoice value was held not to represent the real transaction value, as the importer and foreign supplier were related, the goods were shown at a notional value, and the evidence showed that the copy produced for customs did not reflect the actual invoice value. The declared value was therefore rejected under the Customs Valuation Rules, and the valuation was determined sequentially in the absence of reliable identical or similar goods data. As no dependable basis existed for Rules 5 to 7A, the residual method under Rule 8 was applied on the basis of the Chartered Engineer's assessment. The Tribunal also accepted the finding that the importer had misdeclared the value, attracting confiscation and penalty.

Conclusion: The declared value was rightly rejected, the assessable value under Rule 8 was upheld, and the confiscation and penalty were sustained, all against the assessee.

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