TMI Blog2004 (9) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.02.1999 and F-38/24.02.1999. Some of the goods under these Bills of Entry were cleared for home consumption whereas others were cleared for warehousing. These Bills of Entry were provisionally assessed. A Show Cause Notice was issued to them calling them to show cause as to why the transportation charges from the anchorage of the Vessel to the jetty should not be included in the assessable value as admittedly the charges of the barges which brought the imported goods from the anchorage to the jetty were paid by the appellant and was not included in the CIF price of the goods. The appellant, in reply to the show cause notice claimed that the place of importation was the anchorage point and the transportation cost till the anchorage point only was to be added. They also claimed that the vessel could not reach the jetty only because of insufficient draft and these activities of bringing the goods from the anchorage to the jetty were undertaken by the buyer on their own account and the same could not be considered as indirect payment to the seller." 3. The appellants themselves have described the crux of the issue in Paragraph 6 of their appeal memorandum as follows :- "The Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Law Ministry on the issue of includibility of barge charges in addition to landing charge of 1%. 6. Since the aforesaid Circular dated 13-4-2004 has been issued by the Board for ensuring uniformity in assessment throughout the country, we take note of its contents which are as follows :- "Subject : Customs Valuation Rules, 1988 - Inclusion of barging/lighterage charges in the assessable value - Regarding. Representations have been received in the Board to clarify whether barging/lighterage charges are includible in the assessable value of the imported goods as "extended cost of transportation" under Rule 9(2)(a) of the Customs Valuation Rules, 1988 or the same are covered under the 1% "landing charges" levied by the Department under Rule 9(2)(b) of the Customs Valuation Rules, 1988. It has been reported that the 'standard practice is to include the same in the assessable value, except in the case of Mumbai Custom House. 2. Due to non-availability of deep draught all ports are not navigable up to the Jetty and therefore the goods have to be discharged/transhipped at the outer anchorage. Further, in many busy ports, goods are off loaded at the anchorage on barges in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988 which are germane to the issue at hand :- "9. Cost and Services :- (1) x x x (2) For the purposes of sub-section (1) and sub-section (1A) 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) x x x (ii) The charges referred to in Clause (b) shall be one per cent of the free on board value of the goods plus the cost of transport referred to in relation to in Clause (a) plus the cost of insurance referred to in clause (c). (iii) x x x (3) x x x (4) x x x" Place of importation 8. Rule 9(2)(a) refers to the 'cost of transport' to the place of importation and Rule 9(2)(b) refers to "loading, unloading and handling charges" associated with the delivery at the place of importation. As such, for the resolution of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Port Lat : 22.24 '20"N Ro Ro Jetty (i) 37.3 mtr x 20 mtr = 746 mt 2 North : KPT Control Building Long: 69.40'27E Lo Lo Jetty (ii) 68 mtr x 20 mtr = 1360 mt 2 North: Sea Water Front Barge Unloading (iii) Facility. 13.4 mtr Dia Ringer Crane backed up by Sand bags North Sea Water Front (iv) Back up Area 50,975 mt 2 East Approach Road Following the ratio of the Garden Silk Mills (supra), we come to the conclusion that the notified places of unloading are indeed the 'place of importation' referred to in Section 14(1) and Rule 9(2). Nature of Barging charges 10. Rule 9(2)(a) requires cost of transport to the place of importation to be added to the value whereas Rule 9(2)(b) requires loading, unloading and handling charges at the place of importation to be added to the value. The proviso (ii) to Rule 9(2) fixes the letter at '1% of f.o.b. value + cost of transport + cost of insurance'. Thus the amount of 1%, commonly known as landing charges, refer to charges representing loading, unloading and handling charges at the place of importation. On the other hand, barg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barge charge to such places cannot be considered as cost of transport after importation. The note is meant to exclude transport charges from jetty/wharf to, a warehouse or inland container depot and not the transport charges incurred prior to the goods reaching a jetty/wharf. 13. The appellants as well as the D.R.s have referred to the Apex Court decision in the case of Coromandal Fertilisers Ltd. v. C.C., 2000 (115) E.L.T. 7 (S.C.). In the said case, the Apex Court had ruled that stevedoring charges and unloading charges cannot be again added to the value once and fixed percentage towards landing charges has been added. It was also a case where the importers maintained their own wharf, unloading equipment and staff for the same. The charges considered by the Apex Court in this case (vide Paras 1 and 5 of the order) were related to unloading of the goods from the ship berthed at the wharf. It did not deal with transport charges incurred in bringing goods from anchorage to the wharf. In the present case, we are dealing with a case where barge charges were incurred in transporting goods from the ship at the anchorage to the notified place of unloading at the jetty. Hence the rati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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