Customs valuation excludes ship demurrage before the 2007 rule change, with reassessment made without inclusion.

Ship demurrage charges were not includible in the assessable value of imported goods for the period up to 09.10.2007 because the Customs (Valuation) Rules, 1988 contained no express provision authorising such addition. The later Customs (Valuation) Rules, 2007 introduced an explicit provision for inclusion only from 10.10.2007, confirming that the earlier regime did not permit it. The position was aligned with section 14(1) of the Customs Act, 1962, under which demurrage is not part of the intrinsic value of imported goods absent a specific valuation rule. Reassessment was directed without adding demurrage.

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Issues: Whether ship demurrage charges were includible in the assessable value of imported goods for the period prior to 10.10.2007.

Analysis: The Customs (Valuation) Rules, 1988 contained no specific provision for inclusion of ship demurrage charges. The later Customs (Valuation) Rules, 2007 introduced an express provision for such inclusion only with effect from 10.10.2007. The issue had already been settled by the Larger Bench and supported by the view that, under Section 14(1) of the Customs Act, 1962, demurrage is not part of the intrinsic value of the imported goods and cannot be added in the absence of a specific charging or valuation provision. The earlier valuation rule did not authorise such addition for the disputed period.

Conclusion: Ship demurrage charges were not includible in the assessable value of the imported goods up to 09.10.2007, and the reassessment was directed without such inclusion.

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