Customs valuation excludes tug and beaching charges where delivery terms already include port-related costs at importation.

Tug charges and beaching-related expenses incurred to move an imported vessel from anchorage to the beaching place were not includible in customs assessable value where the contract for delivery at the place of importation already covered local tug assistance and related port costs. The contract price was treated as the value for delivery at the time and place of importation, and expenses incurred to effect that agreed delivery could not be added under Section 14 of the Customs Act, 1962. The valuation rules cited by the Revenue did not justify treating those amounts as separate transportation or handling charges. The appeal succeeded and the assessment addition was set aside.

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Issues: Whether tug charges and other beaching-related expenses incurred for moving an imported vessel from anchorage to the beaching place were includible in the assessable value over and above the contract price.

Analysis: The contract documents showed that delivery obligations included local tug assistance and other port-related costs at the port of delivery, while beaching was undertaken pursuant to the contractual arrangement governing delivery at the place of importation. On the facts, the contract price represented the value for delivery at the time and place of importation and included costs incurred for effecting such delivery. In such circumstances, additional charges incurred after the contractual delivery terms could not be loaded into value under Section 14 of the Customs Act, 1962. The valuation rules relied upon by the Revenue did not justify adding these amounts as separate transportation or handling costs in the manner proposed.

Conclusion: The tug charges and beaching expenses were not includible in the assessable value, and the addition made in assessment was unsustainable.

Final Conclusion: The appeal succeeded and the assessment order was set aside.

Ratio Decidendi: Expenses forming part of the agreed delivery obligation at the place of importation cannot be added to the customs assessable value as post-delivery transport or handling charges.

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