2003 (11) TMI 90 - SC - Customs

Transaction value under Rule 4(1) determines assessable value of imported second-hand machinery; Rule 4(2) needs exceptional facts before Rule 8

SC held that the assessable value of imported second-hand machinery must be determined by the transaction value under Rule 4(1); only if exceptional ... Determination of assessable value of imported machinery - Second hand machinery - Held that:- Mode of determination of the value of the goods in question in such matters as has been laid down in Rule 4(1), the transaction value will have to be determined and under the Rule 4(2), if any exceptional circumstance is found then the transaction value indicated in Rule 4(1) will have to be rejected and further determination have to be made under Rule 8 - None of the authorities advert to this Rule or say for what reasons as provided under Rule 4(2) the transaction value will have to be rejected - Decided in favour of assessee. Issues: Determination of assessable value of imported machinery under Customs Act and Customs Valuation Rules.Analysis:1. The appellant imported machinery and the Assessing Authority determined the assessable value at Rs. 53,77,412 based on a chartered engineer's certificate indicating a useful residual life of at least 10 years with maximum depreciation of 70%. This determination was made in accordance with Section 14 of the Customs Act, 1962 and Customs Valuation Rules, 1988.2. The appellant appealed the decision, citing a previous Supreme Court ruling in Eicher Tractors Ltd. Haryana v. Commissioner of Customs, Mumbai, which emphasized the importance of following the prescribed rules for determining the value of imported goods. The Court noted that the procedure outlined in Rule 4(1) and Rule 4(2) was not followed in this case, as no exceptional circumstances were provided for rejecting the transaction value under Rule 4(2).3. Consequently, the Supreme Court allowed the appeal, set aside the previous orders, and directed that the Bill of Entry submitted by the appellant should be accepted. Any payments made by the appellant were ordered to be refunded. This judgment highlights the necessity of adhering to the prescribed rules and procedures for determining the assessable value of imported goods under the Customs Act and Customs Valuation Rules.