2022 (3) TMI 368 - AT - Customs

Valuation of imported goods - Import of Liquified Petroleum Gas or LPG - internationally LPG sold as Commercial Butane Commercial Propane or Commercial Propane-Butane Mixture - demurrage charges are includible in the assessable value or not? - entitlement for benefit of exemption Notification No. 82/2004 dated 18/08/2004 and Notification No. 37/2005 dated 02/05/2005. Inclusion of demurrage charges in the assessable value - HELD THAT - As the issue whether the demurrage charges are includible in the assessable value or not has been settled by the Hon ble Apex Court in the case of C.C.E. MANGALORE VERSUS MANGALORE REFINERY PETROCHEMICALS LTD. 2016 (1) TMI 325 - SUPREME COURT wherein it has been held that the demurrage charges are not includible in the assessable value - thus the demurrage charges are not includible in the assessable value as the same are essentially post importation charges that are incurred after the goods reached the Indian ports - the demands on account of inclusion of demurrage charges in the assessable value are set aside. Entitlement for benefit of exemption Notification No. 82/2004 dated 18/08/2004 and Notification No. 37/2005 dated 02/05/2005 or not? - HELD THAT - While filing the provisional Bills of Entry no protest was made with regard to classification of their product i.e. LPG. Therefore at this juncture the issue of classification cannot be raised to get the benefit of the above cited Notifications. Similar view was taken by this Tribunal in the case of M/S HINDUSTAN PETROLEUM CORPN. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE-I 2020 (9) TMI 561 - CESTAT MUMBAI and M/S H.P.C.L. VERSUS COMMR. OF CUSTOMS KOLKATA 2019 (4) TMI 1277 - CESTAT KOLKATA - Therefore the appellants are not entitled for benefit of exemption Notification No. 82/2004-Cus. dated 18/08/2004 and Exemption Notification No. 37/2005 dated 02/05/2005. Appeal allowed in part.

Summary

Issues:
1. Inclusion of demurrage charges in assessable value
2. Entitlement of the appellant for benefit of exemption Notifications

Analysis:

Inclusion of demurrage charges in assessable value:
The issue of whether demurrage charges are includible in the assessable value was deliberated. The appellant argued that the demurrage charges should not be included as they are post-importation costs, citing a Supreme Court ruling and a relevant case law. The Tribunal concurred with this argument, stating that demurrage charges are incurred after the goods reach Indian ports and are not part of the assessable value. Consequently, the demands for including demurrage charges in the assessable value were set aside.

Entitlement of the appellant for benefit of exemption Notifications:
Regarding the appellant's entitlement to benefit from specific exemption Notifications, it was observed that the appellants had classified their product under a particular Customs Tariff Heading during the filing of provisional Bills of Entry. The Tribunal noted that the issue of claiming the benefit of the exemption Notifications was not raised during this initial classification process. The Tribunal referenced a case where the appellant continued to declare their imported product under a specific heading even after a reduction in duty rates. As a result, the Tribunal held that the appellants could not raise the issue of classification at a later stage to avail themselves of the benefits under the aforementioned Notifications. This decision was supported by previous Tribunal judgments on similar matters. Consequently, the appellants were deemed not entitled to the benefits of the exemption Notifications.

In conclusion, the appeals were disposed of based on the above analysis and findings, with the Tribunal ruling in favor of the appellants on the issue of demurrage charges but against them regarding the entitlement to exemption Notifications.