COMMISSIONER OF CUSTOMS AHMEDABAD Vs. ESSAR STEEL LTD

JUDGEMENT

(1.) The respondent No. 1 had imported Iron ore Pellets from Brazil and, Bahrain to Hazira in the State of Gujarat between March, 1990 and September, 1991. For this purpose, the respondent No. 1 had arranged with its sister concern, the respondent No. 4, to take five vessels from the Time Charter. Of the five vessels, one belonged to respondent No. 4. The respondent No. 1 paid the duty on the cost of transportation as certified by the respondent no. 1. Pursuant to investigations made by the appellants, certain invoices raised by the respondent No. 4 on the appellants were found. The invoices were relied upon by the appellants for issuing show cause notices to the respondent No. 1 and the respondent No. 2 by which it was, inter alia, proposed to increase the value of the cost of transportation.

(2.) It is undisputed that under Section 14 (1) of the Customs Act, 1962 read with Rule 9 (2) of the Customs Valuation (Determination of price of Imported Goods) Rules, 1988, the cost of transportation is includible in the value of the goods.

(3.) The Commissioner confirmed the demand as raised in the show cause notices and imposed penalty on the respondents 1 and 2 as well as on some officers and levied interest on, what was claimed to be, the difference between the cost of transportation as disclosed by the respondent No. 1 and the cost of transportation as ascertained. The matter ultimately came up before the Customs, Excise and Gold (Control) Appellate Tribunal. The Tribunal held that the demand was not sustainable and set aside the impugned order of the Commissioner. The decision of the Tribunal appears to be correct having regard to this Court's opinion as expressed in Union of India v. Gosalia Shipping Put. Ltd. reported in 1978 (3) SCC 23.