Valuation - Demurrage charges and dispatch money not to form part of the assessable value.

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Valuation (customs) - Demurrage charges and despatch money not to form part of assessable value: F. No. 467/21/89-Cus.V, dated 14-8-1991. Government of India, Ministry of Finance, (Department of Revenue), Central Board of Excise & Customs, New Delhi. Subject: Demurrage charges and despatch money not to form part of the assessable value – Regarding: The Kandla Custom House had raised the issue relating to the inclusion of demurrage charges and exclusion of despatch money for computing the assessable value ascertainable under Section 14 of the Customs Act, 1962. Pursuant to the decision taken in the Tariff Conference of Collectors held in August, 1981, the issue was further discussed in the Tariff Conference of February, 1989. The Conference had desired that the matter may be reexamined in its totality especially in the context of current valuation principles based on the GATT Valuation at Goa on 4th and 5th April, 1991 examined the problem posed in entirety. The conference carne to the conclusion that in the post despatch money would not constitute elements of value since element for the carriage. These moneys are in the nature of penalties or rewards by virtue of a contracted charterer agreement between the carrier and the charterer and this in no way could be conceived as being part of the freight or for that matter part of the price actually paid or payable for the goods. 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. JUDICIAL ANALYSIS C.B.E. & C Circular No. 467/21/89-Cus.-N, dated 14-8-91 was cited by assessee which clarify that demurrage and dispatch money are not to form part of the assessable value - In view of this Circular, Tribunal ordered that demurrage charges not to be included in assessable value - Indian oil Corporation v. Commissioner - 2000 (122) E.L.T. 615 (Tri.-LB). Appealed to Supreme Court admitted in 2001 (130) E.L.T. A254 (S.C.). C.B.E. & C Circular No. 467/21/89-Cus.-lV, dated 14-8-91. - Assessee referred this Circular and plea that in view of this Circular Bank charges not to be includible in the assessable value - Appeal of assessee allowed. - EXIM India Oil Co. Ltd. v. Commissioner - 2001 (131) E.L.T. 207 (Tribunal). Appeal to Supreme Court dismissed as time barred in 2002 (143) E.L.T. A269 (S.C.).

HS Codes Referenced

Acts & Provisions Referenced

• Customs Act, 1962.

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