Comparable foreign price for customs valuation fails unless identity and similarity of goods are reliably established from the record.

An imported machine could not be valued by reference to the price of an alleged comparable U.K. machine because the record lacked sufficient particulars to establish identity or similarity, including model, size and import circumstances. In the absence of a reliable comparable, the foreign price was rejected as a valuation basis. The assessable value was then fixed on the documentary FOB value disclosed by the record, as the importer did not prove that the machine was old or that the declared value reflected a new-machine price. Because the valuation was substantially reduced, the redemption fine was also reduced.

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Issues: (i) whether the price of the U.K. machine could be adopted as the basis for determining the assessable value of the imported machine; (ii) what the correct assessable value and redemption fine should be in the facts of the case.

Issue (i): whether the price of the U.K. machine could be adopted as the basis for determining the assessable value of the imported machine

Analysis: The documents produced for the imported machine did not contain sufficient particulars such as model, size, or other identifying features to establish identity or similarity with the allegedly comparable U.K. machine. The order under appeal also did not show the relevant particulars of the comparable machine, nor the circumstances of its import. On such a record, the foreign price could not safely be treated as a reliable comparable for international trade valuation.

Conclusion: The U.K. price could not form the basis for assessing the value of the imported machine.

Issue (ii): what the correct assessable value and redemption fine should be in the facts of the case

Analysis: The importer did not establish that the machine was an old machine or that the declared value represented the new-machine price in 1987. The invoice and cash memo were separated by about four months and showed a substantial difference in price without explanation. In these circumstances, the declared documents were preferred over the rejected comparable value, and the assessable value was fixed on the FOB basis disclosed by the record. Since the valuation was substantially reduced, the redemption fine also required reduction.

Conclusion: The assessable value was fixed at Hong Kong $ 15,600 FOB and the redemption fine was reduced to Rs. 10,000/-.

Final Conclusion: The challenge to the valuation based on the U.K. price succeeded, but the import remained liable to confiscation and duty was to be reassessed on the substituted FOB value with a reduced redemption fine.

Ratio Decidendi: An imported good cannot be valued on the basis of an alleged comparable foreign price unless identity or similarity of the goods is reliably established from the record; where such basis fails, the authority may reassess value on the best available documentary evidence and adjust the redemption fine accordingly.

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