ISPAT INDUSTRIES LTD. Vs. CC (P)

JUDGEMENT

(1.) The appellants imported Iron Ore. The nearest Jetty for them to receive the consignment was at Dharamtar in Raigad District. The Collector of Customs (Prev.), Bombay issued a Notification No. 1/94 (NT) dated 3.10.94 to facilitate such unloading. The notification in its entirety reads as follows: I, M.G. Venugopalan, Collector of Customs (Prev.), Bombay, by virtue of powers vested in me under Section 8(a) of the Customs Act, 1962 (52 of 1962) hereby approve 'Dharamtar' port in the Dist. Raigad, State of Maharashtra, detailed in the schedule bel'ow and as specified in Col. No. 2 & 3 of the said Schedule to be the place for unloading/loading of imported/export goods and permit anchorage of mother vessel of M/s. Nippon Denro Ispat Ltd., Dharmtar, Taluka Alibag only at BFL, Bombay High Sea subject to the strict observance of relevant provisions of the Customs Act, 1962 and other instructions issued by the Government of India from time to time; and also specify the limits of Customs area at Dharamtar Port as indicated in column No. 6 of the said schedule to which the provisions of the said Act shall apply.

(2.) The vessels carrying such iron ore from overseas port could not dock at Dharamtar due to lack of draft. Such Vessels were therefore, allowed to be anchored at the Bombay Light (BFL). The cargo was unloaded from the sea going vessel into barges and was then transferred to Dharamtar Jetty and unloaded there.

(3.) Between 14.2.95 to 21.1.98,14 consignments were thus imported. The Bills of Entry were provisionally assessed. The duty so assessed was deposited. Thereafter, "out of charge" order was given and only thereafter the ore was unloaded in the barges. Bills of Lading show that port of discharge was "Mumbai Port/JNPT/Dharamtar". In the Bill of Entry, the FOB price, freight, the actual freight and actual insurance were shown separately in US Dollars. On 7.2.99, the Jurisdictional Asst. Commissioner of Customs, referring to Rule 9(2)(b) of the Customs valuation Rules, 1988, opined that cost incurred in transferring the ore to the Dharamtar Jetty is includible. The relevant details were asked for. In the reply, the present appellants stated that the place of importation was BFL from where the goods were cleared "for home consumption". It was therefore claimed that the lighterage charges were not includible. Thereafter, the Customs issued 2 show cause notice for finalisation of the provisional assessment. The importers appeared before the Asst. Commissioner on 3.7.98. The Asst. Commissioner issued his order on 23.10.98. In the initial part of his order, he observed that the assessment had already been finalised in April and July, 1998 (appellants contested this), but proceeded to give reasons and confirmed the demand of Rs. 18,55,988. He dwelt on the 'time and place of importation'. From the import manifest, he observed that the unloading station was declared as Dharmtar Port. He held that BFL was not the landmass of India and that the import in terms of Customs Act was not completed unless the goods were put on the landmass of India. He referred to a number of judgments before ruling that the lighterage charges were includible in the assessable value. Against the judgment, the importers filed an appeal. The Commissioner upheld the lower order in the following words: I have carefully gone through the records of the case and heard the appellant. The expression "imported goods" has been defined in Section 2(25) of the Customs Act, 1962 to mean "any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption". In the present case, the out of charge order under Section 47 of the Customs Act, 1962 permitting clearance of goods for home consumption was passed before the discharge of cargo from the mother vessel to the barges. However, as the assessment was provisional, the out of charge order for home consumption was not final. Therefore, the import cannot be said to have completed unless the goods reached the landmass of India. The transport charges incurred in relation to carrying of the goods in barges are, therefore, to be included in the assessable value. In view of this, I do not find any merit in the appeal and reject the same.