SHRIRAM FIBRES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE question that arises for consideration is whether the customs duty is leviable on landing charges as forming part of the price or value of the goods within the meaning of Section 14 of the Customs Act, 1962

(2.) THE short facts relevant for the purposes of this case are as follows : M/s. Shriram Fibres Limited, who is the petitioner in both the writ petitions imported several items including caprolactum. In W.P. No. 4103 of 1983 it imported a consignment of 2000 bags of caprolactum and the bill of entry dated 26-9-1981 was filed. THE Assistant Collector of Customs fixed the notional landing charges at a percentage of .6% and arrived at the landing charges at Rs. 4, 762.74. He levied customs duty at the rate of 25% and c.v. duty at the rate of 28.5% plus 5% working out to Rs. 2, 972.25. THE actual landing charges were Rs. 1, 216.51. THE duty was paid and the goods were cleared but a claim for refund was made on 2-12-1982 before the Assistant Collector of Customs. Two grounds were urged viz., that the duty was not chargeable on the landing charges at all and the entire amount was refundable and alternatively even if duty was payable on landing charges there was no jurisdiction to levy on a notional basis and it should be done only on the basis of actual landing charges incurred. THE Assistant Commissioner by his order dated 18-1-1983 accepted the second contention and directed a refund of Rs. 2, 212.35. Thus it was held that the petitioner was liable to pay a sum of Rs. 759.18 by way of customs duty on landing charges.

(3.) THE Delhi High Court gave a similar ruling inSuper Traders and Anotherv. Union of India and Others. THE Court observed in para 27 at page 276 as follows : "Thus import is extricably associated with goods being brought into India so as to form a part of the mass of goods in the country. THE only way the goods imported by the petitioner can become a part of mass of goods inside the country can be after they have been off-loaded from the ship and brought to the port. But before that situation can be achieved landing charges will have to be incurred so that the goods could be brought to the Port. That is why when valuation of the goods for the purpose of assessment is to be calculated under Section 14 of the Customs Act it will have to be at a value inclusive of landing charges. We are, therefore, satisfied that the Customs authorities are justified in including the landing charges in the assessable value of the goods imported into India for the purpose of computation of the customs duty. THE plea, therefore, fails"* . InB.S. Kamath and Co.v. Union of India the Karnataka High Court has expressed the same view. InGovind Ram Aggarwalv. Collector the Calcutta High Court has also expressed a similar view.