Landing charges and assessable value: separate stevedoring or unloading addition was impermissible after percentage-based estimation.

Landing charges represent the expenditure incurred to bring imported goods to land, and where Customs estimates those charges at a percentage of CIF value for convenience, that estimate is treated as covering the importer's total landing-related expenditure. Once Customs had adopted 1.4% of CIF value as landing charges, it could not separately add stevedoring or unloading charges to the assessable value, as that would amount to a double addition. Reference to port services under the Major Port Trusts Act did not justify splitting out a further component after a percentage-based landing charge had already been applied. The separate addition was therefore impermissible and the issue was decided in favour of the assessee.

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Issues: Whether, after customs authorities have assessed landing charges at 1.4 per cent of the CIF value of imported goods, stevedoring or unloading charges can again be added to the assessable value.

Analysis: Landing charges denote the expenditure incurred to bring imported goods to land. While such charges may be assessed on actuals, a percentage-based assessment is often adopted for convenience and, when so assessed, it is intended to cover the totality of the importer's expenditure for landing the goods. Once the Customs authorities had adopted 1.4 per cent of CIF value as landing charges, they could not split out an alleged component of unloading or stevedoring and add it separately. Reliance on the port services contemplated by the Major Port Trusts Act did not justify a double addition where landing charges had already been estimated on a percentage basis.

Conclusion: The separate addition of stevedoring or unloading charges was impermissible and the issue is decided in favour of the assessee.

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