2006 (9) TMI 18

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....harge of cargo from vessel, the vessels had to be detained for period longer than the laytime (contracted period for discharge of material) and consequently demurrage had to be paid by the importers. These demurrage charges were the moneys paid by the importers to the charterer of the vessels arid the same were not included in the assessable value of the goods for payment of Customs duty. The Customs authorities took the view that these charges were includible as part of freight in the assessable value. It was held that the banking charges involved in the remittance of demurrage were also includible in the assessable value. Accordingly, a show-cause notice was issued to the appellants for recovery of differential amounts of duty on the good....

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....d re-examined the issue [whether demurrage charges and dispatch money (bank charges) were includible in the assessable value] in the light of GATT valuation principles and decided that such charges must not form part of the assessable value of goods imported in chartered vessels vide Circular Vo. 467/21/89-Cus.Vdt. 14.8.91. This circular was withdrawn on 2.3.2001 vide Circular No. 14/2001-Cus., [reported in 2001 (43) RLT M160] wherein it was laid down by the Board that demurrage charges were required to be included in the assessable value of such goods. The immediate question before us is which of these circulars would govern the valuation dispute in the present case. After hearing both sides and considering their submissions, we find that ....

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....d contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars." Paragraphs 14 & 15 of the apex court's judgment in IOC case are particularly relevant to the instant case and hence reproduced below:- "14. During the period in question, the following circular had been issued by the Central Board of Excise and Customs with regard, inter alia, to demurrage charges: "Subject: Demurrage charges and dispatch money not to form part of the assessable value - Regarding. The Kandla Custom House had raised the issue relating to the inclusion of ....