Valuation of imported second-hand cars: invoice value may be rejected, and later depreciation instructions can apply in redetermination.

Declared invoice value for an imported second-hand car may be rejected where it does not reflect the correct assessable value, including omitted reconditioning and freight charges; valuation is then to be redetermined on the accepted basis with reference to the World Car Catalogue price and appropriate adjustments. On depreciation, the original allowance of 46% was found inadequate for a 1984 model imported in 1989, and later beneficial governmental instructions increasing the permissible depreciation for second-hand cars were applied, requiring a revised allowance of 52%. The assessment was sustained in principle, but the assessable value had to be revised, granting partial relief to the importer.

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Issues: (i) Whether the declared invoice value of the imported second-hand car could be accepted for assessment, and (ii) whether the depreciation allowed in re-determining the assessable value was correctly worked out.

Issue (i): Whether the declared invoice value of the imported second-hand car could be accepted for assessment.

Analysis: The assessable value was to be determined on the accepted valuation basis for second-hand imported cars with reference to the World Car Catalogue price, after taking into account relevant adjustments. The declared invoice value was found not to reflect the correct assessable value because the original declaration had omitted reconditioning charges and freight charges. The rejection of the invoice value was therefore upheld.

Conclusion: The declared invoice value was not accepted for assessment and the re-determined assessable value was upheld on principle.

Issue (ii): Whether the depreciation allowed in re-determining the assessable value was correctly worked out.

Analysis: The car was a 1984 model imported in 1989, and the depreciation allowed at 46% was held to be inadequate. The later governmental instructions enhancing the maximum permissible depreciation for second-hand cars were applied to the case, resulting in entitlement to a higher depreciation rate.

Conclusion: The depreciation was required to be increased to 52% in place of 46%.

Final Conclusion: The assessment was sustained in principle, but the assessable value had to be re-determined by granting higher depreciation, thereby granting partial relief to the importer.

Ratio Decidendi: In valuation of imported second-hand cars, the declared invoice price may be rejected where it does not reflect the correct assessable value, and subsequent beneficial instructions on permissible depreciation can be applied to pending past cases when re-determining value.

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