2016 (6) TMI 662 - AT - Customs

Valuation - inclusion of demurrage charges paid to the supplier on account of detention of the vessel beyond the lay time into the assessable value of the imported LPG - Held that - ship demurrage charges paid for detention of the ship beyond the lay time was not to be considered as transport cost as it was not ordinarily paid - ship demurrage charges cannot be included in the discharges of custom duty on the imported goods even if the assessments are made provisionally - Decided in favor of assessee.

Summary

Issues:
1. Inclusion of demurrage charges in the assessable value of imported goods for custom duty purposes.

Analysis:

Issue 1: Inclusion of demurrage charges in the assessable value of imported goods for custom duty purposes

The case involved a dispute regarding whether demurrage charges paid for the detention of a vessel beyond the lay time for imports during the period 2002-04 should be included in the assessable value for custom duty purposes. The appellant argued that such charges should not be included, citing a decision by the Supreme Court and a larger bench of the Tribunal in favor of the assessee. They contended that demurrage charges are incurred post-importation and should not form part of the transaction value. The appellant also highlighted a decision by a larger bench of the Tribunal in a previous case where it was held that ship demurrage charges cannot be included in the discharge of custom duty on imported goods, even if assessments are provisional. The appellant further argued that interest is not demandable as the relevant provision was inserted after the period of imports in question. On the other hand, the respondent reiterated the findings of the Commissioner of Customs who had confirmed the demand based on the inclusion of demurrage charges in the assessable value.

The Tribunal, after hearing both sides and examining the records, concluded that the issue of including demurrage charges in the assessable value had been settled in favor of the appellant by the Supreme Court and a larger bench of the Tribunal. They held that ship demurrage charges paid by the appellant should not be included in the assessable value of imported goods for custom duty purposes. Citing the precedent set by previous judgments, the Tribunal found the impugned order unsustainable in law and set it aside, allowing the appeal with any consequential relief. The decision was pronounced in open court.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision regarding the inclusion of demurrage charges in the assessable value of imported goods for custom duty purposes.