Demurrage charges in customs valuation treated as assessable value, with duty settled, confiscation noted, and prosecution immunity granted.

Demurrage charges payable on imported goods were treated as relevant to assessable value under customs valuation rules, so the differential duty and interest already paid were appropriated against the admitted liability and no further amount survived. Non-disclosure of the demurrage charges was treated as creating liability to confiscation, but because the goods had not been seized, no redemption fine was imposed. In view of the prior payment, disclosure and cooperation, no penalty was imposed and immunity from prosecution was granted under the settlement scheme.

---

---

Issues: (i) Whether demurrage charges formed part of the assessable value for import duty and whether the differential duty and interest paid could be settled and appropriated; (ii) whether the imported goods were liable to confiscation under the customs law and whether redemption fine was leviable; (iii) whether penalty and prosecution should be imposed or waived in the facts of the case.

Issue (i): Whether demurrage charges formed part of the assessable value for import duty and whether the differential duty and interest paid could be settled and appropriated?

Analysis: The imports were found to have involved non-disclosure of demurrage charges which were payable over and above the normal freight and were therefore relevant to assessable value under the customs valuation framework. The applicant had already paid the differential duty and interest before the settlement order, and the Bench recorded full disclosure, cooperation in investigation, and discharge of the admitted liability.

Conclusion: The differential duty and interest were settled at the amounts already paid and were appropriated towards the tax liability, with no further liability surviving.

Issue (ii): Whether the imported goods were liable to confiscation under the customs law and whether redemption fine was leviable?

Analysis: The non-disclosure of demurrage charges led to short collection of customs duty, attracting confiscability under the confiscation provision. However, the goods had not been seized at any stage, and that factual position removed the basis for imposing a redemption fine in lieu of confiscation.

Conclusion: The goods were held liable to confiscation, but no redemption fine was imposed.

Issue (iii): Whether penalty and prosecution should be imposed or waived in the facts of the case?

Analysis: The Bench took note of the applicant's payment of duty and interest before appearance, the bona fide explanation regarding valuation, and the overall cooperation shown. In these circumstances, the Bench took a lenient view and granted immunity from prosecution under the settlement scheme.

Conclusion: No penalty was imposed and immunity from prosecution was granted.

Final Conclusion: The settlement concluded the customs dispute by accepting the admitted duty and interest already paid, declining penalty, and granting prosecution immunity, while maintaining the finding that the goods were liable to confiscation without any redemption fine.

Ratio Decidendi: Demurrage charges payable in connection with imported goods are relevant to assessable value for customs duty, but where the admitted differential duty and interest are fully paid and the settlement authority is satisfied with disclosure and cooperation, the liability may be settled without penalty, though confiscability may still follow from non-disclosure.

---