Declared value of second-hand machinery cannot be rejected solely on an unsubstantiated domestic expert report when foreign certification is credible.

Declared transaction value for imported second-hand machinery must be accepted when supported by a credible overseas Chartered Engineer's certificate, including the year of manufacture, and there is no independent evidence of extra payment or other grounds to discredit it. A domestic Chartered Engineer's contrary opinion, based only on visual inspection, market enquiries or unsubstantiated past records, is insufficient by itself to reject the declared value. On that basis, the article states that rejection of value, confiscation and penalty were unsustainable, and the transaction value remained acceptable under Section 14 of the Customs Act.

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Issues: Whether the declared transaction value of imported second-hand machinery was liable to be rejected on the strength of a domestic Chartered Engineer's report, and whether the consequent findings of misdeclaration, confiscation and penalty could be sustained.

Analysis: The declared invoice value was supported by an overseas Chartered Engineer's certificate, which also certified the year of manufacture. The domestic Chartered Engineer's report was found unreliable because it was based on visual examination, market enquiries and alleged past inspection records that were not properly substantiated, and because no convincing reason had been recorded for discarding the overseas certificate. In the absence of evidence of any clandestine extra payment, the transaction value could not be rejected merely on the basis of a subsequent contrary opinion. The reasoning adopted in the earlier decisions followed by the Tribunal was applied to the present imports.

Conclusion: The declared transaction value was liable to be accepted under Section 14 of the Customs Act, and the orders of confiscation and penalty were unsustainable.

Ratio Decidendi: Where the importer's declared transaction value of second-hand machinery is supported by a credible foreign Chartered Engineer's certificate and no independent reason exists to discredit it, a subsequent domestic expert opinion cannot, by itself, justify rejection of the declared value, confiscation or penalty.

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