Valuation practice of second hand machinery to be adopted by all Custom Houses/ Customs Commissionerates-regarding

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....ommissioners of Customs & Central Excise Sir, Subject: Valuation practice of second hand machinery to be adopted by all Custom Houses/ Customs Commissionerates-regarding/- It has been noticed that the Custom Houses / Customs Commissionerates have been adopting different assessment practices with regard to valuation of imported Second Hand Machinery / Capital Goods. As this was resulting into diverse assessments the following guidelines are being issued so that assessments are done as far as possible on their basis. 2. A careful analysis of the Tribunal decisions and an Apex Court judgement on the issue of valuation of second-hand machinery reveal the following views of the judiciary: i) If other parameters of Section 14 of the Customs ....

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....rs like description, period of usage, extent of the re-conditioning, year of manufacture, model no., price when new, etc., are misdeclared either in the Chartered Engineer's Certificate or in the invoice. There will also be no difficulty in rejecting the transaction value in cases which are hit by the provisions to Sub-Rule (2) of Rule 3. Difficulties may however be faced in situations other than those described above. 4. In this context, attention of the assessing officers is drawn to Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules,2007 which provides for rejection of declared value under certain circumstances. Following views have emerged from various Tribunal decisions on the application of Rule 12: i....

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....is found to be much below the value arrived at by the depreciation method on the basis of the certified price of the new machinery in the year of its manufacture, the assessing officer may have reason to doubt the truth or accuracy of the declared value, and ask the importer to furnish further information and explanation. If he is satisfied, he may accept the declared value. But, if he still has reasonable doubt about the truth or accuracy of the declared value, he can reject the declared value under Rule 12, and proceed to re-determine the value under Rule 9 by following the Board's circular No. F.No. 493/124/86-Cus VI dated 19.11.87 in respect of the depreciation to be extended to such second hand machinery. 6. In fact, for other import....