Tribunal deems demurrage charges ultra vires in customs duty calculations, provides relief

The Tribunal allowed the appeal against the penalty imposed under section 114A of the Customs Act, 1962. It held that demurrage charges, including landing charges, were deemed ultra vires by the Orissa High Court and should not be included in customs duty calculations. The Tribunal found the penalty unsustainable due to the exclusion of demurrage charges from the assessable value calculation, referencing relevant case law and providing consequential relief to the appellant.

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Issues Involved:
1. Imposition of penalty under section 114A of the Customs Act, 1962 for alleged suppression of information regarding landing charges on demurrage charges in the assessable value calculation for customs duty.

Detailed Analysis:
1. The appeal was filed against an order imposing penalty under section 114A of the Customs Act, 1962. The appellant had imported goods and paid customs duty, including 1% landing charges and demurrage charges. The department alleged that landing charges should also apply to demurrage charges. However, the appellant contested this, citing a judgment by the Hon'ble High Court of Orissa that struck down the provision including demurrage charges in the assessable value calculation.

2. The appellant argued that the demurrage charges, including landing charges, were held ultra vires of the Customs Act by the Orissa High Court and should not be included in customs duty calculations. The appellant had already paid the duty but contested the penalty under section 114A. The appellant also referred to a judgment involving M/s Wipro Ltd, where the Supreme Court held that 1% landing charges could only be included if actual costs were unascertainable.

3. The Tribunal noted the arguments and the Orissa High Court's decision on demurrage charges. It concluded that since demurrage charges had been struck down from the assessable value calculation, the penalty under section 114A was not sustainable. Therefore, the Tribunal allowed the appeal and set aside the penalty imposed, providing consequential relief.

This detailed analysis covers the issues involved in the legal judgment, including the arguments presented, relevant case law references, and the final decision by the Tribunal.

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