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Issues Involved:
1. Inclusion of demurrage, wharfage, and stock loss charges in the assessable value of imported petroleum products. Issue-wise Detailed Analysis: 1. Inclusion of Demurrage, Wharfage, and Stock Loss Charges in Assessable Value: The primary issue in this case was whether demurrage, wharfage, and stock loss charges should be included in the assessable value of the imported petroleum products. The importers had purchased the goods from Indian Oil Corporation (IOC) on a high seas sale basis. The goods were assessed provisionally, and the final invoice included charges for demurrage, wharfage, and stock loss. The importers contended that these charges should not be included in the assessable value under Section 14 of the Customs Act. The Revenue argued that, in terms of Rule 4 of the Customs Valuation Rules (CVR), 1988, the value of imported goods should be the price actually paid or payable for the goods when sold for export, including all payments made or to be made by the buyer to or for the benefit of the seller. They contended that these charges were pre-determined and formed part of the contractual price agreed upon at the time of the high seas sale. The Tribunal noted that the terms of the contract between IOC and the importers included these charges as part of the final price. The lower appellate authority had concluded that the importer's liability to pay for the goods arose as soon as the goods were loaded at the load port, and these charges were pre-determined and agreed upon at the high seas, making them part of the assessable value. The Tribunal distinguished the present case from the Larger Bench decision in Indian Oil Corporation Ltd. v. CC, Calcutta, where demurrage charges were not included in the assessable value due to their occurrence in extraordinary situations post-importation. In the current case, the charges were pre-determined and agreed upon at the high seas, making them part of the cost, insurance, and freight (CIF) value. The Tribunal held that these charges should be included in the assessable value when the importers purchased the goods on a high seas sale basis. The lower appellate authorities were found to be wrong in excluding these charges from the assessable value, and the Revenue's appeals were allowed. Separate Judgments: Member (Technical) - Jeet Ram Kait: Jeet Ram Kait, Member (Technical), held that the demurrage, wharfage, and stock loss charges should be included in the assessable value as these expenses were pre-determined and agreed upon at the high seas sale. He emphasized that these charges were part of the CIF value and should be considered for import duty assessment. Member (Judicial) - Archana Wadhwa: Archana Wadhwa, Member (Judicial), disagreed with the majority view and held that these charges should not be included in the assessable value. She relied on the Larger Bench decision in Indian Oil Corporation Ltd. v. CC, Calcutta, and the Ministry's Circular, which stated that demurrage charges are not part of the price actually paid or payable for the goods. She argued that these charges were post-importation costs and should not be included in the assessable value. Third Member on Reference - P.G. Chacko: P.G. Chacko, Member (Judicial), agreed with the view of Jeet Ram Kait, Member (Technical). He held that demurrage, wharfage, and stock loss charges paid by the importers to IOC in terms of the high seas sale agreements should be included in the assessable value. He emphasized that the Valuation Rules treated an ex-high seas seller as a foreign supplier and the buyer in India as the importer, making the terms of the high seas sale contract relevant for customs valuation. Majority Order: The majority decision, supported by P.G. Chacko and Jeet Ram Kait, held that the appeals filed by the Revenue were allowed, and the demurrage, wharfage, and stock loss charges should be included in the assessable value of the imported goods. The orders of the lower appellate authorities were set aside.
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