1990 (3) TMI 189 - AT - Customs

Tribunal upholds inclusion of landing charges in customs duty calculation, emphasizes substantiating claims

The tribunal dismissed all appeals, affirming that landing charges are part of the assessable value for customs duty calculation. The inclusion of landing ... Valuation Issues Involved:1. Inclusion of landing charges in the assessable value of imported goods.2. Inclusion of wharfage charges in the assessable value.3. Whether freight paid included landing charges.4. Basis for including wharfage charges if applicable.Detailed Analysis:1. Inclusion of Landing Charges in the Assessable Value:The primary issue is whether landing charges should be added to the assessable value of imported goods for customs duty calculation. The appellants argued that landing charges should not be included as the import is complete once goods enter territorial waters. However, the tribunal noted that several judgments, including *Super Traders and Another v. Union of India* and *MRF Ltd. v. CC, Madras*, contradicted this claim, establishing that landing charges form part of the assessable value. The tribunal concluded that the import process is not complete until goods are landed, pass through the Port Trust, and are presented for customs assessment, as supported by the Supreme Court judgment in *Khandelwal Metal & Engineering Works v. Union of India*.2. Inclusion of Wharfage Charges in the Assessable Value:The appellants contended that the customs department did not initially seek to include wharfage charges in the assessable value, and the Collector (Appeals) had ruled in their favor on this issue. The tribunal agreed, noting that the customs department had not pursued the inclusion of wharfage charges at any stage, rendering this ground redundant.3. Whether Freight Paid Included Landing Charges:The appellants asserted that landing charges were already included in the freight paid to the shippers, and no additional charges were incurred. They argued that adding landing charges again would result in double taxation. However, the tribunal observed that the appellants failed to provide any documentary evidence or contracts with shippers to substantiate this claim. The tribunal emphasized that it was the appellants' responsibility to prove their claim, and the customs department was not required to disprove it. The tribunal noted that the practice of calculating landing charges as a percentage of the CIF value was well-established, uniform, and not arbitrary.4. Basis for Including Wharfage Charges if Applicable:The appellants suggested that if wharfage charges were to be included, it should be based on actual charges, supported by receipts from the Bombay Port Trust. However, the tribunal found that the appellants had conflated wharfage charges with landing charges and had not provided any evidence of actual landing charges. The tribunal reiterated that the practice of adding a percentage of the CIF value as landing charges was justified, ensuring uniformity and efficiency in customs assessments.Conclusion:The tribunal dismissed all appeals, affirming that landing charges are part of the assessable value and rejecting the appellants' claims due to a lack of evidence. The tribunal upheld the established practice of calculating landing charges as a percentage of the CIF value, emphasizing its legality and practicality.