Customs valuation of used imports must reflect actual market value, not a new article's list price, under the statutory test.

Imported second-hand goods must be valued under Section 14(1) of the Customs Act on the basis of the ordinary international market value of such or like goods at the time and place of importation, on an arm's length basis and with price as the sole consideration. Rule 8 of the Customs Valuation Rules, 1988, being a residual method, cannot justify an arbitrary or fictitious valuation or the use of a new car's list price without a reliable comparable second-hand market basis. The customs valuation adopted on that approach was unsustainable, and the assessment was quashed with remand for reassessment under the correct statutory framework.

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Issues: Whether the import value of a second-hand car was required to be determined on the basis of the manufacturer's list price of a new car, or by reference to the actual value of such or like second-hand goods in accordance with Section 14(1) of the Customs Act and Rule 8 of the Customs Valuation Rules, 1988.

Analysis: Section 14(1) requires valuation to be based on the price at which such or like goods are ordinarily sold in the course of international trade at the time and place of importation, on an arm's length basis, with price as the sole consideration. Rule 8, being the residual method, is expressly subject to Section 14 and cannot authorise a valuation that ignores the statutory test or substitutes an arbitrary estimate. The use of the price of a new car as the starting point for a second-hand imported car, without a reliable basis for comparable second-hand market value and in disregard of the express exclusions against arbitrary or fictitious values, was held to be impermissible.

Conclusion: The valuation adopted by the customs authorities was unsustainable and the assessment order was set aside; fresh assessment was directed in accordance with Section 14(1) of the Customs Act and Rule 8 of the Customs Valuation Rules, 1988.

Final Conclusion: The writ petition succeeded on the valuation issue, the impugned customs assessment was quashed, and the matter was remitted for reassessment under the correct statutory framework, with interim release of the car and costs granted to the petitioner.

Ratio Decidendi: Imported goods must be valued under Section 14(1) of the Customs Act on the basis of the ordinary international market value of such or like goods at the time and place of importation, and the residual rule cannot be used to justify an arbitrary or fictitious valuation founded on the price of a new article.

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