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Issues: (i) whether the import was protected by the firm-contract exception under the relevant import policy and therefore remained permissible; and (ii) whether the second-hand machine was undervalued for customs assessment purposes.
Issue (i): whether the import was protected by the firm-contract exception under the relevant import policy and therefore remained permissible.
Analysis: The original arrangement for purchase at SEK 440,000 was subsequently altered by extended delivery, fresh negotiations, and a reduced price of SEK 350,000, followed by a fresh invoice. The alteration went to an essential term of sale, namely price, and the later transaction was treated as a substituted contract rather than a mere variation of delivery time. On that basis, the import was not regarded as one made pursuant to the original firm contract and the policy protection was held unavailable.
Conclusion: The import was not protected by the firm-contract exception and was unauthorised; this issue was decided against the assessee.
Issue (ii): whether the second-hand machine was undervalued for customs assessment purposes.
Analysis: The machine was second-hand, its value depended materially on condition and depreciation, and the department had no reliable contemporaneous evidence of an identical import. The reduced price was supported by the machine's continued use and wear, and the record did not justify rejecting the declared value in favour of the enhanced figure adopted by the adjudicating authority.
Conclusion: Undervaluation was not established and the assessed value adopted by the adjudicating authority could not be sustained; this issue was decided in favour of the assessee.
Final Conclusion: The import remained liable to confiscation for want of policy compliance, but the valuation enhancement was set aside and the redemption fine was reduced.
Ratio Decidendi: A contract ceases to be a firm contract for import-policy protection when a material term such as price is substituted by a later agreement, and in customs valuation of second-hand machinery the declared value cannot be displaced without cogent evidence of undervaluation.
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