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KIRPAL,J.

The main question which arises in all these appeals by special leave is whether while assessing customs duty payable in respect of imported goods, the customs authorities can add/include landing charges in arriving at the value of those goods. The facts which are relevant for deciding the issue are similar. For the sake of convenience we will refer to the facts in the case of Garden Silk Mills Limited in greater detail.

The appellants in these appeals had imported polyester yarn from abroad. The transactions for sale and purchase between the foreign supplier and the appellant company were in the nature of CIF contracts i.e. price included costs, insurance and freight charges. These contracts normally provide CIF price for the port of discharge. It is not in dispute that under a CIF contract the price which was paid included not only the cost of the goods but also the insurance and freight charges.

It was submitted by the learned counsel for the appellants that in actual effect in the case of CIF contracts like the present, it is the shipper who pays the landing charges and the Indian importer does not incur these expenses in addition to what he has paid on the basis of the CIF contract. In other words the submission was that the landing charges are already included in the CIF value of the goods as they form part of the freight paid to the steamer agent and the said charges are recovered by the Port Trust authorities directly from the steamer agents and, therefore, a second inclusion of such landing charges by loading a flat percentage of the CIF value is uncalled for. In this connection, reliance was placed on clause 15 of the terms and conditions of a sample of a Bill of Lading which deals with loading, discharge and delivery and reads as under:
It is also submitted on behalf of the appellants that onus of proving that the transaction value does not represent the value for the purposes of Section 14 of the Act and that it has to be loaded with any other elements such as landing charges, is on the Department. We are unable to agree with the submission. The value at which the goods are to be assessed is indicated by the importer when he makes a declaration while submitting a bill of entry under Section 46 of the Act. Once, we come to the conclusion that the landing charges would be included in the determining of the value of the goods imported then the onus has to be on the importer to show that the price indicated in the CIF contract includes therein this element of landing charges. If such an element is included in the CIF contract, that would be within the knowledge of the importer and the Department cannot be asked to prove the negative, namely that the CIF contract does not include therein the element of landing charges.
We do not agree with the aforesaid submission because what has to be arrived at is a deemed price in the manner indicated in the said Section. In determining this deemed price in international trade the element of port charges which have to be borne by the importer, in addition to the CIF value, before the goods can be cleared for human consumption must necessarily form a part or an element of the value. The said Section does not accept as final the price fixed by the purchaser and the seller in the course of international trade as reflected in the CIF contract but it requires determination of value by the customs authorities in the manner indicated therein. What has to be seen is the value or cost of the imported articles at the time of importation i.e. at the time when they reach the customs barrier. Landing charges which have to be paid to the Port Trust must, therefore, be taken into consideration while determining the value of the imported goods for the purpose of assessment of duty. It is only if the importer establishes that the obligation to pay the landing charges is on the seller and not on the importer and that the seller or his agent has, in fact, paid the said landing charges to the Port Trust Authorities, that the importer can claim that the landing charges should not be again added to the price. In none of the cases before us has it been found by any fact finding authority, even in cases of CIF contracts, that the Port Trust Authorities did receive the landing charges from the shipper or the foreign seller and that the said charges were included in the CIF contract.