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TMI Blog1980 (11) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... erritorial waters of India vide Section 2(27) and since import is complete as soon as the goods are brought into India from a place outside India the landing charges which are incurred after importation are post-importation charges and therefore ought not be included in the assessable value. I would not say that appellants grounds are irrelevant or incorrect. However they are too simplistic. Import as defined in Section 2(23) as well as 'India' as defined in Section 2(27) are relevant only for determining the changeability of imported goods to duty in terms of Section 12. However, the value on which such duty should be charged is entirely a matter of Section 14. For that purpose it would not be correct to go by such literal and simplistic interpretation of Sections 2(23) and 2(27). 3. The inclusion of landing charges to arrive at the assessable value is being done by Indian Customs from almost times immemorial. It is being done to my knowledge from some time earlier than 1935 at least, which is the date of earliest manual instructions that I can remember. The landing charges are paid to such agency as may be approved by the Collector of Customs in terms of Section 45(1). In e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition to be made on account of landing charges is publicised. Such percentage additions on account of landing charges are worked out by Customs Department with sufficient data and meticulous care. I should dispel impression if any prevailing in the trade, as if it is done purely arbitrarily. The value of the goods imported is always available to the Customs from their own records. The total amount of landing charges collected is available with the Port Trust and again is a data that are readily available to the Customs. By putting such figures together for a relevant block of time the Customs work out the average landing charges and they adopt such average landing charges as the notional addition to be made on account of landing charges. Thus what is being actually added by the Customs on account of landing charges is not the actual landing charges for each individual consignment but a sort of weighted average of landing charges for all the cargo coming at a port. Since the Port Trusts are all autonomous bodies the rates differ from port to port and each Customs House has its own rate of this weighted average of the landing charges. 5. As I already observed, if the levy of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing charges form part of expenditure incurred in respect of the cargo up to the point of landing and transit to port shed and cannot therefore be construed as post-importation charges, and therefore have to be included in the assessable value". 7. In India import cargo does arrive at many smaller Ports where the Customs Authorities and even the importers are not equipped with up to-date machines or office gadgets to aid calculation. Apart from the legality of the issue even on pragmatic grounds, it would be in the interests of all concerned if no such levy is imposed on landing charges. Calculating the landing charges is a time consuming task. Of course such practical considerations can be no guide to the statutory tribunal like the undersigned. That would have to be a Policy decision by the Government. However, even outside these pragmatic considerations, I have often felt to myself that there is no legal basis for levying duty on landing charges. In various Departmental meetings or forum, I have tried to broach this subject so as to elicit a discussion. However, my efforts always ended without a discussion on merits or legality of the levy and with a presumptive approach th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stevedoring labour is a service which is included within freight charges collected and which are always part of our assessable value. Likewise the steamer has to employ some landing gear. Usually it would employ either its own winches or it would hire wharf cranes from the Port Authority. At one time employing shore cranes was the custom. However the service not only in India but all over the world from port authority-which are mostly governmental bodies-was so very unreliable that almost all Shipping Companies have now built modern ships with their own landing gear. Employment of port authority's cranes is almost the exception now rather than the rule. Fact remains that even today the port authority's cranes are sometimes employed by the ships. It is well-known that the expenses for wages of the winch operator or the actual expenses for running of the winch or the expenses paid to the port authority for cranes hired are all borne by the steamer. Just like the charges for stevedoring labour these are also expenses which the steamer company meets out of freight collection and no extra charge is levied by it on account of the cranage. In other words, with collection of the freigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional landing charges would be proper only if the ex-wharf, or vex-hook delivery of the Shipping Company could be deemed to be falling short of delivery at the place of importation, the terminology of Section 14. 14. In my opinion, the ex-wharf or ex-hook delivery which is implicit in `c.i.f. destination' meets fully the requirements of Section 14. The further charges which the importer pays to the port authorities are on account of removal of the cargo ex-hook to a safe protected place and its proper stacking. It is a charge for a service over and above `delivery at the place of importation'. Naturally nobody renders any service free. If the port authorities render any such service they are entitled to charge for that. The fact remains that it is a charge for a post-importation service and therefore not liable to be included in the assessable value of the goods. 15. In fact there are certain types of cargoes for which business considerations as well as safety warrant that delivery be obtained promptly ex-hook or on overside barges. If the barges are employed by the importer at his own cost he will indeed be accepting no further services from the port authority. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous expression landing charges actually applies to expenses incurred for a service beyond that point. It is the expenses for keeping the Port Authority's wharf-which after all is a transit area-clean. It is the expenses for protection of the cargo and the proper stacking. It is quite clearly a charge for post-importation services. Port Authority's wharf where the cargo is landed by the Shipping Company, with stevedore labour and cranage expenses borne by itself without extra charges beyond freight, is certainly the place of importation. In other words, with collection of freight the Steamer Agents deliver the cargo not free on board the ship but free along side ship at the Port of destination. Expenses of landing cargo from ship's hatches on to wharf are borne by them and are met out of freight collection without any extra fee. What is known by the name of landing charges are not properly landing charges at all but a specific fee for certain post-landing and post-importation services. 18. In the circumstances, I allow this appeal. In my opinion, there is no authority of law to levy duty on this notional addition of landing charges. Whatever expenses are incurred for effect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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