2018 (2) TMI 952 - AT - Customs

Valuation - ship demurrage charges - includibility - Held that - the issue of ship demurrage charges has been settled by the Hon ble Supreme Court in favour of the assessee in CCE, Mangalore Vs. Mangalore Refinery and Petrochemicals Ltd. 2016 (1) TMI 325 - SUPREME COURT , where it was held that The demurrage charges are admittedly incurred after the goods reached at Indian ports and, therefore, it is a post-importation event. Such charges, therefore, cannot form part of the transaction value - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against Order-in-Appeal regarding inclusion of ship demurrage charges in assessable value for charging duties.

Analysis:
The appellant imported crude palm stearin and crude kernel oil, and provisional assessments were made. The Customs department added ship demurrage charges to the assessable value for charging duties, which was upheld in the impugned order. The appellant appealed against this decision. The issue revolved around whether demurrage charges should be included in the assessable value for duty purposes.

The appellant argued that a Supreme Court judgment favored the assessee in a similar case, where demurrage charges were not included in the assessable value. The Supreme Court had previously held that demurrage charges incurred after goods reached Indian ports should not form part of the transaction value. This principle was reiterated in the case of Commissioner of Customs v. M/s. Essar Steel Ltd. The Tribunal, following this precedent, dismissed the appeals as the demurrage charges were post-importation events and could not be considered in the transaction value.

The Tribunal concluded that the demurrage charges incurred after the goods reached Indian ports were not to be included in the transaction value for charging duties. Citing the settled issue by the Supreme Court and following the same precedent, the Tribunal allowed the appeal and dismissed the case.

In summary, the appeal was filed against the inclusion of ship demurrage charges in the assessable value for charging duties. The Tribunal, guided by Supreme Court precedents, ruled that demurrage charges incurred post-importation should not be part of the transaction value for duty purposes. Therefore, the appeal was allowed, and the case was dismissed in favor of the appellant.