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Cc vs Seven Seas Petroleum Pvt. Ltd. And Mgm ... on 1 March, 2005 cites

Indian Oil Corporation Ltd. vs Commissioner Of C. Ex., Calcutta-Ii on 10 April, 2002

at the time of agreement itself which took place at the high seas. Therefore, these expenses cannot be held to be post-importation expenses and on the other hand these were pre-determined as these expenses have been met or agreed to be met by the appellants at the high seas, before the entry of the goods to the territorial waters of the country. We note that in terms of Rule 4 of the CVR, the transaction value of the goods shall be the price actually paid for sale of the goods and in terms of interpretative notes to Rule 4 of the CVR, the price paid or payable shall be total payment made or to be made by the buyer. The appellants have relied upon the judgment of the Larger Bench of the Tribunal in the case of Indian Oil Corporation Ltd. v. CC, Calcutta wherein it was held that demurrage charges incurred by oil companies are not includible in the assessable value. The Larger Bench has held in the cited judgment that the scheme of the Act shows that the Customs authorities will have to determine the value of the imported goods for the purpose of imposing Customs duty and the value or cost of the imported article at the time of importation at the time when it reaches the Customs barrier is to be assessed by the customs authorities and in making this assessment the Customs authorities must keep in mind the price at which such goods or like goods are ordinarily sold or offered for sale. It was also held therein that imported goods are ordinarily sold in situations where demurrage is not paid or becomes payable. The Bench further held that situation where demurrage is paid or becomes payable is not an ordinary situation. It was also held therein that costs incurred on such extraordinary situations cannot be taken into consideration for arriving at the assessable of the goods as demurrage is an expenditure which arises in extra-ordinary situations. In our opinion the cited judgment is distinguishable from the facts of the present case because that was a case where the importer i.e. Indian Oil Corporation imported goods viz. crude oil etc. from foreign country and there was no sale at high seas and the vessel entered the territorial waters of India and had to wait at the port for discharge of the cargo for various reasons such as detention of the vessel etc. and in such a situation, the demurrage and wharfage etc. became post-importation charges and those situations cannot be termed as an ordinary situation but an extra-ordinary situation and it was in those extra-ordinary situation, it was held that the demurrage cannot form part of the assessable value.
Customs, Excise and Gold Tribunal - Calcutta Cites 3 - Cited by 8 - Full Document

Hyderabad Industries Ltd.And Anr vs Union Of India And Ors on 11 May, 1999

15. After examining the submissions, I find that, under Clause (e) of Rule 9(1) of the Valuation, "all other payments actually made or to be made as a condition of sale of the imported goods by the buyer to the seller" were liable to be added to the price actually paid or payable for the said goods. Ex-High Seas sale of goods is not a new species of international trade and the same was in vogue when the Customs Valuation Rules were made. The Rules, however, did not treat imports under ex-High Seas sale contract differently from imports made otherwise. It can, therefore, be safely said that the Valuation Rules treated an ex-High Seas seller as foreign supplier and his buyer in India as importer of the goods. Such a sale of goods is deemed to take place beyond the Indian territorial waters. Therefore, as rightly submitted by Ld. DR, only the terms of the High Seas Sale contract are relevant to the valuation of the goods for Customs purpose. Ld. DR is eminently supported by the Apex Court's judgment in Hyderabad Industries (Supra) and the Tribunal's Larger Bench decision in Eternit Everest Ltd. v. C.C. Bombay cited by him. It is indisputable in the present case that the "High Seas" sale agreements between M/s IOCL and the respondents had provided for payment, by the buyer to the seller of demurrage, wharfage and stock loss charges. Clause 5.2(g) of the agreement between M/s IOCL and M/s MGM International Export for the relevant period provided for payment of actual demurrage by the buyer to the seller. Clause 10.1.3 provided for recovery, by the seller from the buyer, stock loss (in receiving import cargo and handling the goods at terminal) at the rate of 0.15% on final CIF price. Clause 10.1.4 of the agreement stipulated that wharfage and other incidental charges would be recovered at actuals from the buyer. Similar condition existed in the "High Seas" sale agreement between M/s IOCL and M/s Seven Seas Petroleum Pvt. Ltd. Admittedly, demurrage, wharfage and stock loss, which formed a part of the final price shown in the final invoice issued by M/s IOCL,were actually paid by the buyer and these payments were in terms of the sale contract. Rule 9(1)(e) required these elements to be included in the assessable value of the imported goods.
Supreme Court of India Cites 15 - Cited by 116 - B N Kirpal - Full Document

Commissioner Of Customs, Calcutta Etc vs M/S Indian Oil Corporation Ltd. & Anr on 17 February, 2004

The other respondent viz. M/s. Seven Seas Petroleum Pvt. Ltd. were not represented before me. However, their "Written Argument" is on record and the same has been perused. It is argued that as loading, unloading and handling charges (together called landing charges) associated with delivery of the imported goods at the place of importation were added to the CIF value at a fixed percentage (1%) in terms of Rule 9(2), there is no scope for adding actual delivery charges incurred by way of demurrage. Wharfage charges and stock losses were irrelevant to the time of delivery of the goods at the port of importation. Therefore, it is argued, demurrage, wharfage and stock losses had no relevant to the assessable value of the goods in terms of Section 14 of the Customs Act. According to M/s Seven Seas Petroleum Pvt. Ltd., in any case, demurrage charges were not to be treated as part of the assessable value as per the Board's Circular F.No. 467/21/89-Cus. V dated 14.8.1991 and the Supreme Court's decision in the case of Commissioner of Customs, Calcutta v. Indian Oil Corporation Ltd. . Ld. JDR, in his rejoinder, has submitted that the Board's Circular cited by Ld. Counsel is not applicable to the facts of this case inasmuch as, in the case examined by the Board, demurrage charges were paid in terms of a Charter Agreement between the carrier and the charterer, whereas, in the instant case, such charges were paid by the importer (High Seas buyer) directly to the Ex-High Seas supplier viz. M/s IOCL (High Seas seller). It has also been pointed out that, in the case of M/s Indian Oil Corporation Ltd. considered by the Supreme Court, demurrage charges had been paid by the importer to the ship owners and, therefore, the ratio of the Apex Court's decision is not applicable to the present case. Ld. DR has argued that the Valuation Rules did not distinguish between goods imported by High Seas buyer and those imported by a person directly from a foreign supplier. The price actually received by the High Seas seller from the High Seas purchaser (importer) should be the assessable value of the goods. No part of such price is liable to be excluded from the assessable value when it was payable under the High Seas sale contract.
Supreme Court of India Cites 25 - Cited by 486 - P V Reddi - Full Document

Itc Ltd. vs Cc on 16 April, 1998

13. I find that the Larger Bench of the Tribunal in the case of M/s. Indian Oil Corpn. Ltd. has held that demurrage charges incurred by the oil companies is not includible in the assessable value of the petroleum products. While holding so the Larger Bench has taken note of the Ministry's Circular F.No. 467/21/89-CUS (V) dt. 14.8.91 laying down that such demurrage charges can in no way be conceived as part of the freight or for that matter part of the price actually paid or payable for the goods and as such demurrage and despatch money are not to form part of the assessable value. The Larger Bench also took note of an earlier three Member judgment of the Tribunal in the case of Deepak Fertilisers & Petrochemical Corporation. Ltd. v. CC holding that wharfage and demurrage are not landing charges and are not to form part of the assessable value. The subsequent decision of the two Member in the case of Panchmahal Steel Ltd. distinguishing the decision, in the case of Deepak Fertilisers on the ground that these charges were not paid to the port authorities, but were for detention of vessel and pre-landing stage charges and hence includible in assessable value, was held to be not a correct decision by the Larger Bench. The larger Bench has observed that demurrage charge is an expense which arises in extraordinary situation and is not contemplation of the legislature when it enacted the sections or the rules. Such charge, in fact is paid for account of the delay in discharging the goods from the vessel or from removing the same out of the port area. As per the provisions of Rule 9(4), no addition shall be made to the price actually paid or payable in determining the value of the ported goods except for as provided for in the rules. The demurrage, wharfage charges and definitely the charges which are required to be paid for detention of the vessel at the port beyond the normal period. As such whether the same are to be paid by I.O.C. or are to be recovered from the respondents, who are high-sea purchaser, will not make any difference in the legal position of the same being not addable in the assessable value of the goods. As rightly observed by Commissioner (Appeals) that M/s. IOC acted as post-sale bailee for the purposes of clearance of the goods from the customs on behalf of the respondents and such bailee's charges are not to be confused with seller's charges. As such I am of the view that the issue has been rightly decided by the Commissioner (Appeals) and there is no merit in the Revenue's appeal and the same are accordingly rejected.
Customs, Excise and Gold Tribunal - Tamil Nadu Cites 9 - Cited by 12 - Full Document
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