Customs valuation of used machinery: load port engineer's certificate prevails over local valuation when no cogent rejection grounds exist.

Declared transaction value of imported second-hand machinery may be rejected only on legally sustainable grounds under the Customs valuation rules. A local Chartered Engineer's certificate based on visual inspection and market enquiry could not, by itself, justify enhancement where the importer had produced the invoice, bill of lading, packing list, and a load port Chartered Engineer's certificate. In the absence of cogent reasons to treat that primary certificate as false, fraudulent, or unreliable, substitution of one expert opinion for another was impermissible. The text also notes that Circular No. 4/2008-Customs gives primacy to the load port certificate and permits reliance on a local certificate only when primary evidence is unavailable.

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Issues: Whether the rejection of the declared transaction value of the imported second-hand machinery and its enhancement on the basis of a local Chartered Engineer's certificate was sustainable, and whether the load port Chartered Engineer's certificate ought to have been accepted for assessment under the Customs valuation regime.

Analysis: The declared value of imported goods is governed by Section 14 of the Customs Act, 1962, and may be rejected only on legally sustainable grounds under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The record showed that the importer furnished the invoice, bill of lading, packing list, load port Chartered Engineer's certificate, and requested a speaking order under Section 17(5) of the Customs Act, 1962. The local Chartered Engineer's certificate merely relied on visual inspection and market enquiry without disclosing the basis for the enhanced value, whereas the load port certificate contained the technical assessment of the machinery and was not shown to be false, fraudulent, or otherwise unreliable. In the absence of cogent reasons to discard the load port certificate, the substitution of one expert opinion for another could not justify rejection of the declared transaction value. The departmental action also ran contrary to the guidance in Circular No.4/2008-Customs dated 12.02.2008, which accords primacy to the load port certificate and permits reliance on a local certificate only where such primary evidence is unavailable.

Conclusion: The rejection of the declared value and the consequent enhancement of assessable value were not sustainable, and the declared transaction value based on the load port certificate was directed to be accepted.

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