Customs valuation excludes ship demurrage from assessable value when it is not part of statutory transport cost.

Ship demurrage incurred for voyage charter vessels, whether before or after the goods reached the place of importation, was held not to form part of the assessable value under the Customs Valuation Rules. The Explanation to Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had already been struck down as inconsistent with Section 14 of the Customs Act, 1962, and demurrage was not treated as part of the statutory cost of transport for valuation purposes. The demand based on adding demurrage to the assessable value was therefore unsustainable and was set aside.

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Issues: Whether ship demurrage incurred for voyage charter vessels before or after the goods reached the place of importation is includible in the assessable value under the Customs Valuation Rules.

Analysis: The Explanation to Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 had already been struck down as inconsistent with Section 14 of the Customs Act, 1962. Demurrage was not treated as part of the statutory cost of transport for valuation purposes, and the governmental circular was read as supporting inclusion only in the limited context addressed by the rule, not as authorising a broader levy beyond the principal Act. On that basis, demurrage connected with the appellant's imports could not be added to the assessable value.

Conclusion: The demand based on inclusion of demurrage in the assessable value was unsustainable and was set aside in favour of the appellant.

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