Customs valuation of imported cars must rest on evidence-based depreciation, reasonable model price adjustments, and unsupported discounts rejected.

Customs valuation of an imported car required a higher depreciation rate of 52% because the car's age justified a larger allowance than that adopted below. No deduction was permitted for an alleged diplomatic discount, as there was no evidence that such a discount was generally available or claimable as of right. For the plain model, the base price was adjusted by deducting 20% from the deluxe model price, since the earlier 15% reduction was arbitrary and the valuation had to rest on a reasonable, evidence-based basis. The valuation order was modified accordingly, with only partial relief granted.

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Issues: (i) Whether the imported car was entitled to depreciation at 52% of the base price; (ii) whether any deduction was allowable on account of an alleged diplomatic discount; and (iii) whether the base price of the plain model should be determined by reducing 20% from the price of the deluxe model.

Issue (i): Whether the imported car was entitled to depreciation at 52% of the base price.

Analysis: Considering the age of the car, the higher depreciation rate was warranted as against the lesser rate adopted by the lower authorities.

Conclusion: The depreciation claim was accepted and depreciation was directed to be granted at 52%.

Issue (ii): Whether any deduction was allowable on account of an alleged diplomatic discount.

Analysis: There was no evidence that such a discount was available generally to customers or that it could be claimed by the importer as a matter of right.

Conclusion: No deduction on account of diplomatic discount was allowed.

Issue (iii): Whether the base price of the plain model should be determined by reducing 20% from the price of the deluxe model.

Analysis: The deduction of 15% adopted by the lower authority was found to be arbitrary, and the valuation of the plain model was adjusted on a reasonable basis without remand.

Conclusion: The base price was directed to be determined by deducting 20% from the deluxe model price.

Final Conclusion: The valuation order was modified, granting higher depreciation and a larger reduction for the plain model, while rejecting the claim for diplomatic discount, with the appeal succeeding only in part.

Ratio Decidendi: In customs valuation, depreciation and model-based price adjustments must be fixed on a reasonable and evidence-based basis, and unsupported discounts cannot be allowed.

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