Jubilant Life Science Ltd vs New Delhi on 3 October, 2019
The demurrage has not been included as a part of
cost envisaged by the legislation. Further, it is a
kind of penalty. Therefore, it could not have been
envisaged by the legislation to be included in the
definition of Section 14 of the Act. However, in
view of the clarifications by way of judgements of
the Hon‟ble Supreme Court, more particularly in
the cases of Wipro Ltd. (supra), Essar Steel Ltd.
(supra) and Manglore Refinery & Petrochemicals
Ltd. (supra), it is made clear that demurrage
cannot be included for the purpose of valuation
under the Customs Act, 1962. In that view of the
matter, we are of the considered opinion that the
contentions raised by the petitioner that the
relevant provisions in the Principal Act is silent
about the „demurrage‟; thus, it was beyond the
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C/53440/2018-[DB]
the legislative power to include it in the Rules is
accepted and thus the explanation to sub Rule-(2)
of Rule 10 of the Customs Valuation
(Determination of Value of Imported Goods)
Rules, 2007 is held to be bad and hence declared
ultra virus the Constitution/provision of Section
14 of the Customs Act, 1962, and hence the same
is struck down."