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M/s IOCL Versus The Commissioner of Central Excise, Mangalore

2016 (7) TMI 224 - CESTAT BANGALORE

Valuation - inclusion of ship demurrage charges in the transaction value - the appellant is unable to complete the discharge of cargo within the agreed time due to several reasons, and when the vessel is detained at the port for certain period, which is beyond the agreed period due to external circumstances, due to the reasons beyond the control of the appellant - Held that:- the ship demurrage charges cannot be included in the discharges of custom duty on the imported goods even if the assessme .....

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ia undertaking engaged in refining and marketing of petroleum products. The appellants received and stored imported as well as indigenous LPG in bulk and thereafter sent it to various LPG bottling plants in the State of Karnataka, Kerala, Tamilnadu, Andhra Pradesh and Goa for bottling and also for supply of LPG through retail dealers. The appellants import LPG and also enter into an agreement with all other oil companies like Hindustan Petroleum Corporation Ltd., Bharat Petroleum Corporation Ltd .....

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comprise of FOB price per MT and the associated transport and insurance cost up to the port of import. Further, the appellant alleged that as per the contract terms, concerning the period for which a tanker may be retained at the port for discharge of the cargo is adhered to by the appellant. On certain rare occasions, the appellant is unable to complete the discharge of cargo within the agreed time due to several reasons, and when the vessel is detained at the port for certain period, which is .....

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us to the transaction value agreed and operated upon on a CIF basis between the parties. 2.1.1. In this factual background, the appellant was issued a show-cause notice dated 13.03.2007 proposing to redetermine the assessable value of the imported LPG by including the demurrage charges of ₹ 1,66,58,227/- paid to the supplier on account of detention of the vessel beyond the lay time into the assessable value of the imported LPG by invoking the provisions of Rule 9(2)(a) of the Customs Valua .....

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t was inserted only on 13.07.2006 and the impugned import pertains to the period 2002-04. Consequently the provisions of Section 18(3) does not apply. But the learned Commissioner of Customs rejected the contention of the appellant and confirmed the demand. Hence the present appeal. 3. The learned counsel for the appellant submitted that the dispute involved in the present appeal is whether demurrage charges paid for detention of the vessel beyond the lay time for the imports during the period 2 .....

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of the larger Bench of the Tribunal in the case of CC Jamnagar Vs Grasim Industries Ltd [2013(296) ELT 39 (Tri-LB)] wherein the larger bench in para 14 has observed as under:? 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 .....

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