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TMI Blog2013 (10) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 2. 14/2001-Cus. dated 02.03.2001 3. 5/2006-Cus. dated 12.01.2006 4. 26/2006-Cus. dated 26.09.2006 4. After going through the said circular, he would submit that the referral Bench has not considered the amendment to the Customs Act and the Valuation Rules. He would take us through the provisions of Section 14 of the Customs Act, 1962 and also the provisions of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. He would submit that provisions of Rule 9 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 did not contemplate for inclusion of demurrage charges charged by the liners for discharge of customs duty. He would also submit that subsequently when the provisions of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 came into statute, the said Rule 9 had become Rule 10 and an explanation was added to Rule 10(ii) wherein there were specific provisions for including the said demurrage charges, lighterage or barge charges. He would also submit that on the question of inclusion of cost of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value in accordance with the Rules made on this behalf. We find that the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 were enacted by Notification No.51/1988-Cus (N.T), dated 18.07.1988 and were amended from time to time. The said Valuation Rules specifically lays down method of determination of assessable value of the imported goods, shall be the transaction value and an exception counted out, indicating if the transaction value cannot be determined, the value shall be determined by proceeding sequentially through the remainder of rules. Rule 4 of the said rules also indicates that the transaction value of imported goods shall be the price actually paid or payable for the goods when sold for export to India adjusted in accordance with provisions of Rule 9 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The said rule 9 and specifically sub rule 2 needs to be considered for the period in question which reads as under: "(2)For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Customs Valuation Rules which replaced the earlier rules of 1988. The Customs Valuation Rules, 2007 and more specifically Rule 10 is paramateria to the provisions of Rule 9 of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The provisions Rule 10(2) of Customs Valuation Rules, 2007 needs to be considered, which is reproduced. "(2) For the purposes of sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include - (a) the cost of transport of the imported goods to the place of importation; (b) loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation; and (c) the cost of insurance : Provided that - (i) where the cost of transport referred to in clause (a) is not ascertainable such cost shall be twenty per cent of the free on board value of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other associated charges in transportation of the goods from Bombay Floating Light (in short BFL) to Dharamtar Jetty has also to be added for determining the correct assessable value for the purpose of calculating duty. Their lordships after considering the provisions of Section 14 of the Customs Act read with Customs Valuation (Determination of Price of Imported Goods) Rules, 1988, in paragraph 23 held as under: "23.On first impression the submission of learned counsel for the Revenue appears to be sound, because surely the transportation by barge is also part of the transportation of the goods. However, on a deeper analysis, we are of the opinion that the submission of the learned counsel of the Revenue is clearly untenable. Admittedly, all the contracts entered into with the foreign sellers are either CIF contracts or FOB contracts with Bills of Lading nominating Bombay/JNPT/Dharamtar as the ports of discharge. As such the cost of transport has already been included in the price paid to the seller under the CIF contract or an ascertainable freight determined and paid by the buyer from the foreign port to the Indian port. Hence, a further addition to the transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential to making of effective delivery. If there is any delay at the time of unloading for any reason the consignee will have to pay demurrage charges to the port authority in view of the fact that the berth is unnecessary blocked because of delay in unloading. This is an eventuality which has nothing to do with regard to importation of the goods for the purpose of assessment of customs duty. Customs duty is charged on the basis of the value described in the bill of lading. If there is any under-invoicing made, the authority is entitled to take appropriate assessment to find the actual value. In no stretch of imagination the demurrage can be included in the value of the goods for the purpose of assessment of customs duty under Section 14(1) of the Customs Act, 1962 or any other provision of the said Act." 14. It is our considered view the decision of the Apex Court in the case of Ispat Industries Ltd. and the decision of the Hon'ble High Court of Kolkata in the case of Hindustan Lever Ltd. are squarely applicable on the issue which has been referred to Larger Bench. We find that the decision of the Tribunal in the case of Shine Petroleum Pvt. Ltd. and MGM International Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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