Customs valuation principles: additional depreciation allowed on imported car, but freight included and air-conditioner kept separate.

For customs valuation, additional depreciation on an imported car may be allowed where the gap between manufacture and import makes the claim reasonable and genuine; the 3% depreciation was therefore accepted. Actual freight charges incurred for container import are includible in the assessable value; that inclusion was upheld. An air-conditioner was not treated as part of the car for duty purposes because it was not a necessary accessory, and duty on it at the lower applicable rate was sustained.

---

---

Issues: (i) whether further depreciation of 3% was allowable on the imported car's assessable value; (ii) whether the freight charges actually incurred for container import were liable to be included; (iii) whether the air-conditioner was to be treated as part of the car for duty purposes.

Issue (i): whether further depreciation of 3% was allowable on the imported car's assessable value.

Analysis: Having regard to the date of manufacture of the car and the date of import, the claim for additional depreciation was found reasonable and genuine.

Conclusion: The further depreciation of 3% was allowed in favour of the assessee.

Issue (ii): whether the freight charges actually incurred for container import were liable to be included.

Analysis: The actual freight charges were obtained and included in the assessable value, and no ground was found to interfere with that determination.

Conclusion: The inclusion of freight charges was upheld against the assessee.

Issue (iii): whether the air-conditioner was to be treated as part of the car for duty purposes.

Analysis: The air-conditioner was held not to be a necessary accessory of the car, and duty had been charged on it at the lesser rate applicable to it.

Conclusion: The air-conditioner was not treated as part of the car, and the assessee's claim was rejected.

Final Conclusion: The appeal succeeded only to the limited extent of additional depreciation, while the remaining valuation challenges failed.

Ratio Decidendi: For customs valuation, additional depreciation may be allowed where the age of manufacture and import makes the claim reasonable, but actual freight charges are includible and optional accessories are not to be merged with the car for duty purposes.

---