Customs valuation of used imported cars permits ad hoc depreciation beyond four years where the vehicle is older at import.

For customs valuation of a used imported car, depreciation is not confined to the first four years of use where the vehicle is older than that period at importation. The valuation must reflect ordinary market depreciation, and any further reduction beyond the fourth year cannot be fixed by a rigid scale; it must be assessed on the facts of the case on an ad hoc basis. On that approach, additional depreciation was warranted for the fifth year and each succeeding year, and the assessable value had to be recomputed accordingly.

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Issues: Whether depreciation in the value of an imported used car could be allowed beyond the fourth year of use for the purpose of determining its assessable value under the customs valuation rules.

Analysis: The valuation adopted by the original authority allowed depreciation only for the first four years, but the car was seven years old at the time of importation. The applicable valuation principle required the value to reflect the ordinary market depreciation of the vehicle, and the age of the car showed that depreciation could not logically end after four years. At the same time, the extent of further depreciation could not be fixed by a rigid scale and had to be determined on the facts of the case. Since the car was substantially older than the prescribed four-year period, some additional depreciation beyond the fourth year was warranted on an ad hoc basis.

Conclusion: Depreciation beyond the fourth year was allowable, and the assessable value had to be recomputed by applying additional ad hoc depreciation for the fifth year and each succeeding year.

Final Conclusion: The original assessment was set aside and the matter was sent back for reassessment with consequential relief to the appellant.

Ratio Decidendi: Where a used imported car is older than the prescribed depreciation period, depreciation may still be allowed beyond that period on an ad hoc and case-specific basis, and the assessable value must be determined accordingly.

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