Actual freight in import valuation must be included where higher freight was incurred and understated, sustaining confiscation and penalty.

Actual freight incurred on importation was treated as part of the assessable value where the freight paid exceeded the contractual figure and the higher amount was not shown to result from any supplier's mistake. On those facts, understatement of import value justified confiscation, and the redemption fine and penalty were upheld as proportionate to the contravention. The departmental challenge therefore succeeded, and the original adjudication order was restored.

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Issues: (i) Whether the actual freight incurred on importation was required to be added to the assessable value under valuation law; and (ii) whether confiscation of the goods, redemption fine and penalty were justified on the facts.

Issue (i): Whether the actual freight incurred on importation was required to be added to the assessable value under valuation law.

Analysis: The imported consignment was in fact transported by steamer in containers and the actual freight paid was higher than the freight originally contemplated in the contract. The valuation rule governing additions to import price required transportation cost actually incurred to be included. The explanation based on a contractual freight figure was not accepted because the increased freight was not shown to have resulted from any mistake by the supplier, and the facts indicated that the higher freight formed part of the transaction as carried out.

Conclusion: The actual freight incurred was includible in the assessable value, in favour of Revenue.

Issue (ii): Whether confiscation of the goods, redemption fine and penalty were justified on the facts.

Analysis: Since the higher freight actually incurred was not disclosed in the declared value, the import valuation was understated. On those facts, confiscation and imposition of penalty were treated as justified, and the amounts of redemption fine and penalty were found not disproportionate to the gravity of the contravention.

Conclusion: Confiscation, redemption fine and penalty were upheld, in favour of Revenue.

Final Conclusion: The departmental challenge succeeded and the order under appeal was set aside, with restoration of the original adjudication order.

Ratio Decidendi: Where actual freight paid for imported goods is higher than the declared freight and the higher amount is not shown to be the result of an error outside the buyer's transaction, the actual freight forms part of the assessable value and suppression of that element can sustain confiscation and penalty.

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