2013 (1) TMI 638 - AT - Customs

Refund of duty - Cost of transportation Despatch money - Deduction in freight for unloading the vessel before stipulated time - Rule 10 of Customs Valuation Rules Whether any deduction is given in the cost of transport in the form of despatch money, entitled for deduction from assessable value u/s 14 of the Customs Act read with Rule 9(2)(a) of the Customs Valuation (DOP of Imported Goods) Rules, 1988 Department argue that Rule 10 of the Customs Valuation Rules allows only addition of certain items of cost and not deduction and cannot be treated on the same footing as demurrage charges - Held that - Following the decision in case of ASSOCIATED CEMENT CO. LTD. (1998 (5) TMI 128 - CEGAT, MADRAS) and later affirmed by Supreme Court of India that deduction granted by the Shipping Company as despatch money on the cost of transport. When this point is clear then the question gets answered automatically inasmuch as that when this despatch money is a part of freight, such deduction granted will be eligible for exclusion from the assessable value, because only the noted cost of transport would be added to the assessable value. In favour of assessee

Summary

Issues:
Refund claim rejection based on Customs Valuation Rules and lack of challenge to assessment order.

Analysis:
The appellant imported bright yellow sulphuric crude and filed a refund claim based on earning dispatch money, part of transportation cost. The claim was rejected by the lower adjudicating authority citing Customs Valuation Rules allowing only addition, not deduction. The appellant challenged this before the ld. Commissioner (Appeals), who upheld the rejection relying on previous court decisions. The appellant contended that the ld. Commissioner (Appeals) exceeded jurisdiction by introducing new grounds not part of the original notice or order. The appellant argued that if extra transport costs are added to assessable value, deduction for benefits should also be allowed, citing relevant case laws. The Department supported the ld. Commissioner (Appeals)'s findings. The Tribunal noted that the issue of non-challenge to assessment order was not part of the original notice, and the ld. Commissioner (Appeals) overstepped by considering it. Citing relevant case laws, the Tribunal held that deduction of dispatch money earned should be allowed, as done for demurrage charges. The Tribunal referenced previous judgments supporting deduction of despatch money from assessable value, emphasizing fairness in considering benefits of efficiency. The Tribunal ultimately set aside the lower authorities' orders and allowed the appeal with consequential relief, if any.

This detailed analysis of the judgment highlights the key issues of refund claim rejection based on Customs Valuation Rules and the significance of challenging assessment orders in claiming refunds. The Tribunal's thorough examination of relevant case laws and principles ensured a fair decision in favor of the appellant, emphasizing the importance of consistent application of rules and fairness in assessing costs and benefits related to import transactions.