Separately settled demurrage remains outside imported goods' transaction value, while unsupported valuation demands and extended limitation fail.

Separately settled demurrage for vessel delay, where contractually outside the letter-of-credit payment for imported goods, is described as not forming part of the price paid or payable and therefore outside transaction and assessable value. The notes further state that a customs demand cannot be confirmed under a valuation rule not invoked in the show cause notice, particularly where that rule was declared ultra vires. Extended limitation requires evidence of deliberate suppression and intent to evade duty; mere allegations are insufficient.

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Issues: (i) Whether demurrage charges paid separately by the importer for vessel delay formed part of the transaction value and assessable value of the imported goods; (ii) Whether differential customs duty could be confirmed by invoking Rule 10(2) when it was not invoked in the show cause notice; (iii) Whether the extended limitation period under Section 28(4) was invocable.

Issue (i): Whether demurrage charges paid separately by the importer for vessel delay formed part of the transaction value and assessable value of the imported goods.

Analysis: The contractual clause provided that demurrage or dispatch settlements were to be made separately between the buyer and seller, outside the letter-of-credit payment for the goods. Such charges, arising from additional vessel waiting time, were therefore not part of the price actually paid or payable for the imported goods. Inclusion of demurrage would also result in goods under the same contract being assessed at differing values.

Conclusion: Demurrage charges paid separately did not form part of the transaction value or assessable value. The finding is in favour of the assessee.

Issue (ii): Whether differential customs duty could be confirmed by invoking Rule 10(2) when it was not invoked in the show cause notice.

Analysis: The demand was confirmed on the basis of Rule 10(2), although that provision was not invoked in the show cause notice. Further, the provision had been declared ultra vires.

Conclusion: Confirmation of the demand on a ground absent from the show cause notice was unsustainable. The finding is in favour of the assessee.

Issue (iii): Whether the extended limitation period under Section 28(4) was invocable.

Analysis: The department produced no evidence of a positive and deliberate act establishing wilful suppression or intent to evade customs duty. Mere allegations of suppression were insufficient to invoke the extended period for bills of entry covering April 2012 to July 2016.

Conclusion: The show cause notice issued in March 2017 was time-barred. The finding is in favour of the assessee.

Final Conclusion: Separately settled demurrage for port delay is outside the transaction value, and a demand founded on an uninvoiced and invalid valuation provision, without proof of wilful suppression, cannot be sustained.

Ratio Decidendi: Amounts separately settled as demurrage and not constituting the price paid or payable for imported goods cannot be added to transaction value; extended limitation requires proof of deliberate suppression with intent to evade duty.

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