9911796707
TMI Blog2006 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... gas through Cuddalore port. The vessels chartered for the purpose were berthed at the outer anchorage and the goods was pumped into barges (capacity 10 MTs each) which carried the goods to the port. On account of delay in completion of discharge of cargo from vessel, the vessels had to be detained for period longer than the laytime (contracted period for discharge of material) and consequently demurrage had to be paid by the importers. These demurrage charges were the moneys paid by the importers to the charterer of the vessels arid the same were not included in the assessable value of the goods for payment of Customs duty. The Customs authorities took the view that these charges were includible as part of freight in the assessable value. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also imposed penalties on the parties under Section 114A for the period from 28.9.96. The Commissioner's decision is under challenge in these appeals. 2, After hearing both sides and considering their submissions, we find that the Board re-examined the issue [whether demurrage charges and dispatch money (bank charges) were includible in the assessable value] in the light of GATT valuation principles and decided that such charges must not form part of the assessable value of goods imported in chartered vessels vide Circular Vo. 467/21/89-Cus.Vdt. 14.8.91. This circular was withdrawn on 2.3.2001 vide Circular No. 14/2001-Cus., [reported in 2001 (43) RLT M160] wherein it was laid down by the Board that demurrage charges were required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains in operation, the revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. Paragraphs 14 15 of the apex court's judgment in IOC case are particularly relevant to the instant case and hence reproduced below:- 14. During the period in question, the following circular had been issued by the Central Board of Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n no uncertain terms excludes demurrage from the assessable value. In the light of the judicial principles enunciated earlier, it was not open to the appellant to either issue the show cause notice or contend otherwise. The demand based on an assessable value inclusive of demurrage cannot be sustained as long as the circular remained operative and as long as the decisions cited earlier remain good law 3. Finally, their lordships held that the inclusion of demurrage charges in the assessable value of the goods by the departmental authorities was contrary to the directive of the CBEC contained in Circular dated 14.8.91. It was held to the effect that, as long as that circular had not been withdrawn, it was binding on the Customs authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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