1988 (9) TMI 143 - AT - Central Excise

Tribunal reinstates Assistant Collector's decision, upholds averaging landing charges in customs assessment

The Tribunal set aside the Appellate Collector's order and reinstated the Assistant Collector's decision, allowing the department's appeal. The judgment ... Valuation Issues:- Assessment of landing charges in the customs duty calculation.Analysis:The judgment revolves around the assessment of landing charges in the calculation of customs duty on imported goods. Landing charges, typically around 1% of the C.I.F. price of the goods, are levied by port authorities and form part of the assessable value for customs duty. The Customs Houses historically adopted an average rate of landing charges based on previous years' data due to the uncertainty of actual charges at the time of assessment. In this case, the respondents argued that only the actual landing charges should be added to the assessable value, contrary to the average rate practice. The Ld. Appellate Collector accepted this claim, prompting the department to appeal.The Tribunal rejected the Appellate Collector's order, emphasizing the impracticality of assessing duties based on actual landing charges due to the unknown nature of these charges at the assessment stage. Accepting the respondents' argument would necessitate provisional assessments for numerous cases, leading to complexities and additional work for both customs authorities and importers. Referring to a previous High Court decision, the Tribunal highlighted the futility of challenging the inclusion of landing charges in assessable value, given the minimal impact on individual cases compared to the vast number of imports.Ultimately, the Tribunal set aside the Appellate Collector's order and reinstated the Assistant Collector's decision, allowing the department's appeal. The judgment reaffirmed the long-standing practice of averaging landing charges in customs assessment to maintain efficiency and avoid unnecessary procedural complications. The practical interpretation of the law was emphasized, noting that neither the government nor importers would significantly benefit or suffer from the existing practice. The Tribunal concluded that disrupting the established procedure would only result in burdensome and fruitless work for customs authorities and importers, advocating for the preservation of the status quo.