Transaction value for second-hand machinery cannot be rejected without proof of misdeclaration, fraud, or manipulation.

Declared transaction value remains the primary basis for valuing imported second-hand machinery, and it cannot be rejected merely because the year of make is not ascertainable or because a Chartered Engineer's report suggests a different value. The record must establish misdeclaration, fraud, manipulation, or other exceptional circumstances before departure from the invoice value is justified. On the facts discussed, the appellate authority found no such proved grounds, noted consistency with the valuation principles for second-hand machinery, and upheld acceptance of the declared value. The Revenue's challenge therefore failed, and valuation had to proceed on the transaction value basis.

---

---

Issues: Whether the declared transaction value of the imported second-hand machinery was liable to be rejected and re-determined on the basis of the Chartered Engineer's report.

Analysis: The imported goods were second-hand machinery and the year of make was not ascertainable from the machine itself. A Chartered Engineer was appointed and, on the basis of the technology, condition and available indicators on certain parts, the value was re-appraised. The appellate authority, however, examined the record, the Chartered Engineer's report and the Board's circular on valuation of second-hand machinery, and found that the transaction value could not be rejected merely on suspicion. The record did not establish misdeclaration, fraud or manipulation, which are necessary to displace the declared value. The reasoning adopted was also consistent with the principle that transaction value remains the primary method of valuation unless exceptional circumstances justify rejection.

Conclusion: The declared value was rightly accepted and the Revenue's challenge to its rejection failed.

Final Conclusion: The appeal was dismissed and the order accepting the invoice value was upheld, with valuation required to proceed on the transaction value basis in the absence of proved grounds for rejection.

Ratio Decidendi: In the valuation of second-hand imported goods, the declared transaction value cannot be rejected unless the department establishes misdeclaration, fraud, manipulation, or other exceptional circumstances warranting departure from the transaction value method.

---