Customs valuation excludes notional freight for leftover aircraft fuel when no actual freight element exists.

Notional freight could not be added to the assessable value of leftover aviation turbine fuel remaining in an aircraft tank after an international flight. The residual fuel was not carried as cargo or goods in the commercial sense, and its presence in the tank depended on operational factors rather than a freight transaction. As no actual freight element existed, Rule 10(2) of the Customs Valuation Rules, 2007 did not justify an artificial addition to value. The analysis also reflected the principle that customs valuation should, as far as possible, track actual transaction value and avoid notional additions where no relevant cost is shown to exist.

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Issues: Whether notional freight under Rule 10(2) of the Customs Valuation Rules, 2007 could be added to the value of leftover aviation turbine fuel remaining in the aircraft tank on arrival from an international flight.

Analysis: The duty liability on the leftover fuel was not in dispute, but the question was whether any freight element could be attributed to fuel remaining in the tank of an operating aircraft. The residual fuel was not transported as cargo or goods in the commercial sense of freight. The aircraft carried fuel for propulsion and safety, and the quantity left in the tank depended on operational factors. Since no freight element was actually involved, there was no basis to invoke Rule 10(2) for a notional addition. The reasoning also aligned with the settled principle that valuation must, as far as possible, reflect the actual transaction value and not artificial additions where the relevant cost is not shown to exist.

Conclusion: Notional freight could not be added to the assessable value of the leftover fuel, and the revenue appeals failed.

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