Transaction value governs second-hand machinery imports unless cogent evidence justifies rejection and resort to depreciated valuation.

Declared transaction value for imported second-hand machinery is entitled to primacy under Section 14 and Rule 4, even where the goods are used or reconditioned. The declared invoice value may be rejected only on cogent evidence showing it is unreliable, such as contemporaneous higher imports of like goods, fraud, abnormal consideration, or other material displacing Rule 4. In the absence of such evidence, valuation cannot be moved directly to Rule 8 by applying a depreciated new-machinery method. The stated principle is that notional valuation based on depreciated new-goods prices is impermissible unless the declared transaction value is first lawfully rejected.

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Issues: Whether the declared transaction value of imported second-hand machinery could be rejected and the value determined by directly applying the depreciated value method under Rule 8.

Analysis: The declared invoice value was supported by Chartered Engineer's certificates showing the age, condition, reconditioning, and reasonable market value of the machines. The governing principle is that Section 14 with Rule 4 gives primacy to transaction value, even for second-hand machinery, and such value cannot be discarded merely because the corresponding new machinery had a higher price. Rejection of the declared value requires cogent evidence such as contemporaneous imports of like goods at higher values, fraud, abnormal considerations, or other material showing that Rule 4 is inapplicable. In the absence of such evidence, it is impermissible to bypass Rule 4 and proceed straight to Rule 8.

Conclusion: The rejection of the declared transaction value was unsustainable and the appeal succeeded.

Final Conclusion: The assessment had to be made on the basis of the declared transaction value, and the notional valuation based on depreciated new-goods price could not be sustained.

Ratio Decidendi: In valuation of imported second-hand machinery, the transaction value under Section 14 and Rule 4 cannot be rejected unless it is first shown to be unreliable by evidence of contemporaneous higher imports, fraud, or comparable taint; Rule 8 cannot be applied directly without such rejection.

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