Customs valuation of second-hand machinery cannot rest solely on a local certificate when a valid Load Port certificate exists.

Declared value of imported second-hand machinery cannot be rejected under customs valuation principles without a legally sustainable basis, as transaction value remains the starting point under Section 14 of the Customs Act, 1962. Where a Load Port Chartered Engineer's certificate is on record and contains sufficient particulars to establish the used nature of the machinery, a local Chartered Engineer's certificate does not by itself justify re-determination of value. The absence of the year of manufacture in the Load Port certificate was not treated as fatal, and the circular for second-hand machinery valuation permitted reliance on a local certificate only when the Load Port certificate was absent or defective. Valuation based solely on the local certificate was therefore not justified.

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Issues: Whether the declared value of imported second-hand machinery could be rejected and re-determined solely on the basis of the local Chartered Engineer's certificate, despite the existence of a Load Port Chartered Engineer's certificate.

Analysis: The value of imported goods under Section 14 of the Customs Act, 1962 is governed by the transaction value, and rejection of the declared value requires a legally sustainable basis. The Load Port Chartered Engineer's certificate was on record and contained the material particulars sufficient to establish the used nature of the machinery. The local certificate did not create any real dispute on the identity or condition of the goods, and the omission of the year of manufacture in the Load Port certificate was not treated as a fatal defect. The circular governing second-hand machinery valuation contemplated use of a local certificate only where the Load Port certificate was absent or improper, and that situation did not exist here. Rejection of the declared value and enhancement based only on the local certificate was therefore unsustainable.

Conclusion: The declared value could not be rejected on the facts of the case, and the valuation based solely on the local Chartered Engineer's certificate was not justified.

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