TMI Blog2019 (2) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Lower Authority is directed to re-assess Bills of Entry of the appellant for the period 02/03/2001 until 09/10/2007 (both days inclusive) without including the ship demurrage charges in the assessable value of the goods - appeal allowed - decided in favor of appellant. - Appeal No. C/76773/2016 - FO/77105/2018 - Dated:- 12-12-2018 - SHRI P. K. CHOUDHARY, MEMBER (JUDICIAL) And SHRI V. PADMANABHAN, MEMBER (TECHNICAL) Shri Chandan Kumar, DGM (F) for the Appellant Shri S. K. Naskar, A. C. (A. R.) for the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formations to include the ship demurrage charges for the period from 02/03/2001. The dispute regarding inclusion of ship demurrage charges was ultimately decided by the Larger Bench of the Tribunal in the case of Commissioner of Customs Vs. Grasim Industries Ltd., reported in 2013 (296) E.L.T. 39 (Tri.-L.B.). The Larger Bench took the view that the Rule 9 (2) of the Customs (Valuation) Rules, 1988 did not provide for inclusion of ship demurrage charges in the assessable value of imported goods. The Larger Bench further observed that specific provision for including ship demurrage charges was incorporated only in Rule 10 of the Customs (valuation) Rules, 2007. Accordingly, Larger Bench decided that until the Notification of the Customs Valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te in the Customs (Valuation) Rules for inclusion of the ship demurrage charges, until 10/10/2007 when Rule 10 of the Customs Valuation Rules, 2007 made a specific provision. As such, he prayed that the appeal should be allowed up to 09/10/2007. 6. The Ld. DR Justified the impugned Order. 7. The dispute is regarding the inclusion of the ship demurrage charges in the assessable value of the goods imported by the appellant. The Customs (Valuation) Rules, 1988 was superseded by the Customs (Valuation) Rules, 2007 w.e.f. 10/10/2007. The Customs (Valuation) Rules, 1988 did not have specific provision for inclusion of ship demurrage charges. Such provision stands inserted only w.e.f. 10/10/2007. As such, there is no mandate for inclusion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustan Lever Ltd. (supra). Hon ble High Court in that case was considering an identical issue of non-inclusion of the demurrage charges paid to the port trust authority. The Hon ble High Court in paragraph 9 held as under : 9. Value of the goods for the purpose of assessment of Customs Duty has been defined under Section 14(1) of the Customs Act, 1962. According to Section 14(1) of the Customs Act value of the goods means price at which such goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation. When the goods are offered for sale at the place of importation it includes freight charges and as such the freight is included in the value of the said goods. Demurrage is an eventual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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