2007 (4) TMI 56 - AT - Customs

Valuation(Custom) Department contended that the transportation charges from mother vessel to the port of importation included in the assessable value of the goods(rock phosphate) Held that department contention is not correct and allowed the refund claims of the appellant

Summary

Issues:
1. Assessable value determination based on transportation charges from anchorage point to jetty.
2. Refund claim rejection based on premature filing.
3. Interpretation of legal position regarding transportation charges for use of barges.

Assessable value determination:
In Appeal No. E/513/04, the appellant imported rock phosphate through a tidal port where consignments were unloaded from the mother vessel to barges at the anchorage point. The department proposed including transportation charges from the anchorage point to the jetty in the assessable value. The original authority held that only 1% of the CIF value should be added towards landing charges as per Customs Valuation Rules. The Commissioner (Appeals) set aside this order and included barge charges and related transportation expenses in the assessable value. However, the Tribunal referred to legal precedents, including a judgment by the Hon'ble Apex Court and a CBEC circular, to conclude that only 1% of CIF value should be added, resolving the issue in favor of the importer.

Refund claim rejection:
In Appeal No. 836/04, the appellant claimed refunds following a favorable order by the original authority, which was rejected as premature by the subsequent order due to an ongoing appeal by the department. The Commissioner (Appeals) upheld this rejection, stating that the proceedings became unfructuous as the department's appeal was allowed. The Tribunal noted the legal position that the importation is complete when the vessel reaches territorial waters, and the use of barges for local transportation does not impact the valuation of goods, citing a Supreme Court judgment in a similar case. Consequently, the Tribunal set aside the Commissioner's order, allowing the appeals by the importer and directing refund claims to be processed, subject to unjust enrichment verification.

Interpretation of legal position:
The Tribunal analyzed the transportation charges issue by considering the contractual terms, concluding that additional charges for transporting goods by barges from the mother ship to the jetty cannot be added to the valuation of imported goods for customs duty purposes. Referring to the Supreme Court judgment, the Tribunal emphasized that the cost of transport was already included in the price paid under CIF contracts, making further additions impermissible. The Tribunal aligned with the Supreme Court's decision, allowing the importer's appeals and emphasizing the resolution in favor of the importer based on legal precedents and the specific circumstances of the case.