TaxTMI 
TaxTMI 
2007 (10) TMI 201
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....ed and this time is known as lay time. If there is a delay in discharge of cargo, due to various reasons, demurrage is charged by the carrier to the supplier of the goods. In turn the supplier collects this demurrage charges from the importers who are the appellants. The point at issue is whether the demurrage charges are to be included in the assessable value of the goods imported for customs duty purposes. 4. Revenue proceeded against the appellants in both the cases by way of issue of show cause notice for inclusion of the demurrage charges in the assessable value of the goods imported. In the case of the first appellant, the Adjudicating Authority confirmed a demand of Rs.79,73,330/-. Interest to the tune of Rs.28,98,945/- was demanded. Further, a penalty of Rs. 1,08,72,275/- was imposed. The period involved in the case of first appellant is from May 2003 to November 2003. As regards the second appellant, the Commissioner confirmed the duty demand of Rs.20,38,610/- and imposed equal penalty under Section 114A of the Customs Act. The period involved in the case of second appellant is from October 1999 to November 2004. The appellants strongly challenge the impugned orders of ....
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....ore, relying on various decisions the Supreme Court held that the Board's Circular has a binding effect on the Revenue and therefore, the clarification contained in the said circular should be given effect to. Further, she said that since the Supreme Court has not examined this issue on merits and as the Tribunal's order has merged with the order of the Supreme Court the decision of the Tribunal on merits is not binding. She also referred to the further circulars issued on the subject and relied on the Board's Circular No. 14/2001-Cus., dated 2-3-2001 and Board circular 26-9-2006 wherein the issue has been clarified and it has been decided that demurrage charges to be included in the CIF value for the purposes of customs duty. 8. The learned Advocate took us through the statutory provisions and also referred from the Commentary on the GATT Customs Valuation Code wherein it is clarified that the demurrage charges cannot be included to the cost of transportation. We are reproducing the relevant paragraphs from the book Commentary on the GATT Customs Valuation Code by Saul L. Sherman and Hinrich Glashoff :- In certain situations (of FOB shipment to a country applying the CIF sys....
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....rent points of time. In the year 1991, the Board issued a circular based on the discussions in the Tariff Conference of Collectors held in August 1991. According to the Circular, it is stated that "Having regard to the above and the fact that in no other Custom House there was a practice to include or deduct such moneys, it has been decided that 'demurrage' and 'despatch' money may not form a part of assessable value." However in 2001, the Board issued a Circular No. 14/2001-Cus.dated 2-3-2001 wherein it was clarified that "the earlier circular should not be construed as authorizing the exclusion of any ship demurrage charges paid which are required to be included in the assessable value of the goods under Section 14 of the Customs Act, 1962 by virtue of Rule 9(2) of the Customs (Valuation) Rules, 1988." It was stated in the above said circular that the earlier letter dated 14-8-1991 was issued without specifically examining the implications of Rule 9 of the Customs Valuation Rules or the GATT Valuation Rules. In terms of the GATT Valuation Rules, cost of transportation has to be included in the assessable value of the goods, if it had not been included. The view taken is when ther....
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....p; Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: Includability of ship demurrage charges in the assessable value - Decision taken in the Chief Commissioners of Customs Conference on Valuation held at Mumbai on 1-10-2005 and Board meeting dated 28-11-2005. Attention is invited to the Board letter issued vide F. No. 467/01 /2002-Cus. V, dated 20th October 2004 (copy enclosed) [Not printed] on the above subject, wherein, it was conveyed that in light of the decision of the Board to file review petition before the Supreme Court of India, in the case of M/s. Indian Oil Corporation [2004 (165) E.L.T. 57 (S.C.)], al....