SOUTHERN PETRO CHEMICAL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS Bench was constituted pursuant to Misc. Order No. 321/2005 dated 28.4.2005 of the South Zonal Bench, Chennai for deciding on the issue whether "barging charges" i.e. cost of transportation of goods from anchorage of vessel to jetty (place of unloading notified under Section 8(a) of the Customs Act) was to be included in the assessable value of the goods under Rule 9(2) of the Customs Valuation Rules, 1988 read with Section 14 of the Customs Act. The above referral order had noted a conflict of views on the above issue between two other co -ordinate Benches of the Tribunal in the cases of Reliance Industries Ltd. v. Commissioner of Customs and Essar Oil Ltd. v. Commissioner of Customs . While in the case of Reliance Industries Ltd. , it had been held that 'barging charges' were not to be included in the assessable value of the goods, it was held to the contrary in the case of Essar Oil Ltd.

(2.) WE had partly heard the matter on 4.8.2006 and directed the SDR, who represented the Revenue, to produce a map or sketch of the place of loading/unloading as well as the 'Customs area' specified in Notification No. 9/99 dated 4.6.99 issued under Section 8 of the Customs Act by the Commissioner of Customs, Ahmedabad. The map produced by the SDR was examined by this Bench on 11.9.2006 and personal hearing concluded on the same day. After examining the records and considering the submissions made by both sides and the case law cited by them, we took the view that the 'barging charges' were includible in the assessable value of the goods and, accordingly, the referred issue was answered in favour of the Revenue and the assessee's appeal was dismissed. On 11.9.2006 itself, in open court, our decision was pronounced with 'detailed order to follow'. We subsequently noted the Hon'ble Supreme Court's judgment dated 29.9.2006 in the case of Ispat Industries Ltd. v. Commissioner of Customs, Mumbai wherein, on an apparently similar set of facts, it was held that 'barging charges' were not to be included in the assessable value. In the wake of the apex court's judgment, we recalled our order dated 11.9.2006 so as to give an opportunity to both sides to make further submissions with reference to the said judgment. Accordingly, we have reheard both sides.

(3.) THE brief facts of this case are that four consignments of fertilizer had been imported by the appellants from M/s. Cargill Fertilizer Inc., USA during August to November 1999; that at the port of discharge the ships which brought the cargo had to be anchored in the sea a few nautical miles away from the jetty for want of sufficient draft at the jetty for vessels; that, at the anchorage point, the cargo was discharged from the vessel into barges which ferried the goods to the jetty, which was the place notified by the Commissioner of Customs, Ahmedabad under Section 8(a) of the Customs Act for unloading of imported goods vide Notification No. 9/99 dated 4.6.99; that the cost of this transportation of goods from the anchorage of vessel to the jetty, otherwise called 'barging charges', was incurred by the importer; that these 'barging charges' were not indicated in the relevant Bills of Entry nor included in the assessable value of the goods; that the goods had been provisionally assessed to duty on board the vessels by the proper officer of Customs and orders issued under Section 47 of the Customs Act for release of the goods for home consumption; that the duty so assessed was paid and the goods were ferried to the jetty as above; that, in subsequent finalization of the assessments, the 'barging charges' were added to the freight component of the CIF value declared by the appellants and demands of differential duty were raised on them; that the appellants paid (under protest) the differential amounts of duty so demanded, and subsequently claimed refund thereof; that this claim for refund of a total amount of duty of Rs. 2,26,240/ - was rejected by the original authority, which treated the jetty as the 'place of importation' and held that all elements of cost (including barging charges) incurred in the transportation of the goods upto the jetty were to be included in the freight to be part of the assessable value; and that the appeal filed by the party against the order of the original authority was rejected by the Commissioner of Customs (Appeals), who held that the cost of bringing the goods from the ships to the "landmass of India" was part of transportation cost to be included in the CIF value of the goods. Hence the present appeal by the assessee.