2017 (6) TMI 192 - AT - Customs

Valuation - figure relating to payment of cost freight insurance and canalizing commission on the crude oil imported - includibility - Held that - the apex court has settled the issue of demurrage charges in the case of CCE Mangalore vs. Mangalore Refinery & Petrochemicals Ltd. 2016 (1) TMI 325 - SUPREME COURT where it was held that - also reliance placed in the case of Mangalore Refinery & Petrochemicals Ltd. vs. CC Mangalore 2015 (9) TMI 245 - SUPREME COURT wherein the apex court has held that the quantity actually received into shore tank in port in India should be the basis for payment of customs duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Interpretation of Section 14 of the Customs Act, 1962
- Inclusion of demurrage charges in the transaction value for customs duty assessment

Interpretation of Section 14 of the Customs Act, 1962:
The appellants filed appeals against a common Order-in-Appeal, where the Commissioner disposed of appeals due to identical issues. The case involved import of petroleum crude oil in August 1998, provisionally assessed and warehoused. The department proposed to include certain amounts in the transaction value for customs duty assessment. The Deputy Commissioner confirmed this proposal, leading to appeals before the Commissioner (A). The appellant argued that the impugned order misinterpreted Section 14 of the Customs Act, 1962. They contended that only the price paid for goods imported into India should be considered for customs duty levy. The appellant relied on judicial precedents, including the case of Mangalore Refinery & Petrochemicals Ltd. vs. CC, Mangalore, where the Supreme Court emphasized that customs duty is chargeable on goods brought into India. The Court clarified the taxable event as importation into India, emphasizing the importance of goods reaching the customs barriers for levy of customs duty.

Inclusion of Demurrage Charges in Transaction Value:
The appellant also challenged the inclusion of demurrage charges in the transaction value for customs duty assessment. Citing the case of CCE, Mangalore vs. Mangalore Refinery & Petrochemicals Ltd., the Supreme Court held that demurrage charges incurred after goods reach Indian ports are post-importation events and should not form part of the transaction value. The Court emphasized that such charges cannot be considered for customs duty assessment. The Tribunal, after considering the parties' submissions, concluded that these issues were settled by the apex court decisions cited, and therefore allowed the appeals by setting aside the impugned order with consequential relief, if any.

This detailed analysis of the judgment highlights the key issues of interpretation of Section 14 of the Customs Act, 1962 and the inclusion of demurrage charges in the transaction value for customs duty assessment. The Tribunal's decision was based on legal principles and precedents established by the Supreme Court, ensuring a fair and just outcome for the appellant in this case.