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2019 (10) TMI 226 - HC - CustomsValuation - inclusion of 'demurrage' and 'dispatch' money as a part of assessable value.- whether part of freight or not - Validity of "Explanation" to Sub-rule (2) of Rule 10 of the Customs Valuation (Determination of Price Imported Goods) Rules, 2007 - vires of of Section 14 of the Customs Act, 1962 HELD THAT:- It is well-settled principle of the statute that while interpreting a statute, one has to go by the scope and object of the principal Act. Under the principal Act, while amending it on 10th October, 2007, proviso has included the costs and services, including commissions and brokerage, engineering, design work, royalties and licence fees, costs of transportation to the place of importation, insurance, loading, unloading and handling charges to the extent and in the manner specified in the Rules. The demurrage has not been included as a part of cost envisaged by the legislation. Further, it is a kind of penalty. Therefore, it could not have been envisaged by the legislation to be included in the definition of Section 14 of the Act. In view of the clarifications by way of judgments of the Hon'ble Supreme Court, more particularly in the cases of WIPRO LTD. VERSUS ASSISTANT COLLECTOR OF CUSTOMS & OTHERS [2015 (4) TMI 643 - SUPREME COURT], it is made clear that demurrage cannot be included for the purpose of valuation under the Customs Act, 1962. Thus, the contentions raised by the petitioner that the relevant provisions in the Principal Act is silent about the demurrage; thus, it was beyond the legislative power to include it in the Rules is accepted and thus the explanation to Sub-Rule (2) of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods)Rules, 2007 is held to be bad and hence declared ultra vires the Constitution/provision of Section 14 of the Customs Act, 1962, and hence the same is struck down.
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