2008 (4) TMI 106 - AT - Customs

Whether the demurrage incurred by the appellants are includible in the assessable value of the imported goods Superior Kerosene Oil (SKO) during the period from 1998 to November 2003 - held that the Board s Circular No. 26/2006 dated September 26, 2006 cannot have retrospective effect - hence demurrage charges are not includible in the assessable value of goods imported prior to issue of this circular

Summary

Issues:
- Inclusion of demurrage charges in the assessable value of imported goods.

Analysis:
1. Background: The appeals were filed against a common Order-in-Appeal passed by the Commissioner of Customs (Appeals), Bangalore, regarding the inclusion of demurrage charges in the assessable value of imported Superior Kerosene Oil (SKO) by the appellants. The issue revolved around whether demurrage charges paid by the importers should be included in the assessable value of the goods.

2. Legal Position: The Commissioner (Appeals) relied on Board circulars to support the inclusion of demurrage charges in the assessable value. However, the appellants contested this decision, stating that the issue had not been conclusively decided by the Hon'ble Supreme Court. They argued that the Board's circulars were the correct interpretation of the law and binding on departmental officers until a contrary view was provided by the Supreme Court.

3. Tribunal's Decision: The Tribunal analyzed previous decisions, including one involving M/s. Shine Petroleum Pvt. Ltd., to determine the legal position on the inclusion of demurrage charges in the assessable value. The Tribunal noted conflicting stances taken by the Customs Board over the years but ultimately relied on the Supreme Court's decision in the IOC case. The Tribunal held that demurrage charges were not includible in the assessable value during the relevant period before the law was amended. The Tribunal emphasized that the benefit of the Supreme Court's decision had to be extended to the appellants for the relevant period.

4. Conclusion: The Tribunal concluded that, based on the legal precedents and the specific circumstances of the case, the demurrage charges should not be included in the assessable value of the imported goods for the relevant period. The Tribunal set aside the impugned orders, allowed the appeals, and provided consequential relief to the appellants. The decision was based on the principle that the law in effect during the relevant period should govern the treatment of demurrage charges in the assessable value, in line with the Supreme Court's decision in the IOC case.