TaxTMI 
TaxTMI 
2002 (10) TMI 714
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....or discharge at Haldia/Budge Budge usually on two Port discharge basis; that in case of serious draft restrictions at the discharge Ports, the Mother vessel is unable to travel to the discharge ports; that to overcome this situation, chartered Daughter vessels are engaged and the imported goods are transhipped from the Mother vessel to the Daughter vessel in high seas or at transhipment ports of Vishakhapatnam or Chennai; that the Daughter vessel then brings the goods to the Ports of Haldia/Budge Budge; that a show-cause notice dated 16-3-2002 was issued for demanding differential duty during the period 1995-96 to September, 1999 on the ground that the freight of the Daughter vessel from transhipment port to Haldia/Budge Budge Ports should have been included in the assessable value for the purpose of Customs Duty; that the Commissioner, under the impugned Order, has confirmed the demand of Customs duty, imposed penalty under Section 114A and demanded interest under Section 28AB of the Customs Act besides imposing a further penalty of Rs. 10 lakhs under Section 112 of the Customs Act holding that freight of Daughter vessel has to be included in the Assessable value. 3. The lea....
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....O.C. Ltd. v. C.C. Calcutta, 2000 (122) E.L.T. 615 wherein it has been held that the price at which the imported goods are ordinarily sold should be the basis for valuation and as the demurrage is not ordinarily payable it cannot become part of the value of the goods. 4. The learned Sr. Counsel also contended that the entire demand is time barred as the period for which notice has been issued falls beyond the period of six months; that all primary facts had been placed before the appropriate authority; that they had also specifically pointed out the Customs duty on C&F imports to the place of importation; that there was neither any mis-representation nor any wilful suppression of facts; that the Appellants are a Government undertaking engaged in distribution of critical petroleum products and their bonafides could not be questioned since no personal interest could be involved in their case. Reliance has been placed on the decision in the case of Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax, 1980 (6) E.L.T. 295 (S.C.) wherein it has been held that if the assessee entertained a belief that he was not liable to include the amount of freight in the tax....
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....livery at the time and place of importation and shall include, inter alia, the cost of transport of the imported goods to the place of importation. It is not disputed by the Appellants that the place of importation is Haldia/Budge Budge Port and the delivery of the imported goods is also given at these discharge ports. Further, it has been decided by the Apex Court in the case of Garden Silk Mills Ltd. v. U.O.I., 1999 (113) E.L.T. 358 (S.C.) that "the import of goods into India would commence when the same cross into the territorial waters but continues and is completed when the goods become part of the mass of goods within the country; the taxable event being reached at the time when the goods reach the customs barriers and the bill of entry for home consumption is filed". The other facts which are not in dispute are that the petroleum products are brought from foreign port in Mother vessel and transhipped to Daughter vessel on account of draft restrictions. The Appellants have contended that the transhipment through the Daughter vessel is nothing but continuation of the journey undertaken by the Daughter vessel and the freight upto Haldia has been included in the assessable value....
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....nue, the daughter vessels are being regularly from 1995-96 and draft restriction at Haldia/Budge Budge is well known factor. Thus the extraordinary circumstances of grounding the vessel available in Swadeshi Polytex is missing here. The deployment of Daughter vessel is to be considered as normal situation. The decision in Turner Morsi Son & Co., supra, in fact supports the case of Revenue as it has been held therein that the Smaller Ships into which cargo was off loaded from the Super Tankers berthed off shore are also "foreign-going vessels." 7. In respect of C&F contract, the Adjudicating Authority has given his findings to the effect that de-escalation clearly results in cancellation of original two ports price and converts the contract into a single Port C&F and for the transport of the cargo to the second discharge port (Haldia/Budge Budge) the Appellants have to deploy the Daughter vessels for which they pay the freight charges in addition to the C&F price paid to the foreign supplier up to the First Port of discharge. We agree with the Adjudicating Authority that the freight incurred by the Appellants is payment made to the foreign supplier according to the actual deli....