Chartered Engineer certificate for second-hand machinery value accepted absent cogent independent reason to reject

Declared transaction value and year of manufacture for second-hand imported machinery were accepted where the importer supported them with a bona fide foreign supplier's Chartered Engineer's certificate. The Tribunal held that such evidence could not be rejected merely because a later domestic expert opinion differed, particularly when the certificate was not shown to be false, fraudulent, or irrelevant and the goods were sourced from a dealer rather than a manufacturer. The department's market enquiry did not provide sufficient independent reason to displace the declared value. On that basis, assessment was to proceed on the declared value and manufacture year, and confiscation and penalty were unsustainable for want of misdeclaration.

---

---

Issues: Whether the declared transaction value and year of manufacture of imported second-hand machinery were liable to be accepted, and whether confiscation and penalty under the Customs Act could be sustained.

Analysis: The importer supported the declared value and year of manufacture with a foreign supplier's Chartered Engineer's certificate. The certificate was not shown to be false, fraudulent, or irrelevant, and it specifically certified the manufacturing year, the reasonable second-hand value, and the residual life of the machinery. The rejection of that evidence merely on the basis of a subsequent domestic expert opinion was held unjustified, particularly when the goods had been sourced from a dealer and not from a manufacturer. The market enquiry undertaken by the department also did not displace the declared value. Applying the earlier view on similar facts, the Tribunal held that the certificate-backed transaction value could not be discarded without sufficient independent reason.

Conclusion: The declared year of manufacture and transaction value were accepted for assessment under Section 14 of the Customs Act, 1962. As there was no misdeclaration, the confiscation order and penalty were unsustainable and the assessee succeeded.

Ratio Decidendi: In the absence of cogent independent reason to reject it, a bona fide Chartered Engineer's certificate supporting the declared value of second-hand imported machinery cannot be displaced merely by a contrary subsequent expert opinion.

---