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OFFICE OF THE
COMMISSIONER OF CUSTOMS, |
PUBLIC
NOTICE NO . 118 /2001
Sub: Regarding inclusion of ship demurrage charge in
Valuation of Goods.
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Government
of India, Ministry of Finance, Department of Revenue, New Delhi, Circular No.14/2001-Cus.V, vide F.No.467/25/2000-CUS.V
dated 02.03.2001, is reproduced below for the guidance of the importers,
Clearing Agents and Trading Public.
C11/15/2001-AP (PORT) (S. SANKARAVADIVELU)
CUSTOM HOUSE, CHENNAI-1. DY. COMMR. OF CUSTOMS (APPG.)
DATE : 24.05.2001
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CIRCULAR NO.14/2001-CUS.V
F.NO.467/25/2000-CUS.V
DATED 02.03.2001
Kind attention is invited to the Board’s letter issued
vide F.No.467/21/89-Cus-V, dated 14.8.1991, which states that ‘demurrage’ and ‘dispatch’ money may not form a part of assessable value.
2.
The decision of the Board was based on the then
prevailing practice and a general perception of the Conference of Collectors
held in April, 1991 about the nature of demurrage charges and dispatch money,
without specifically examining the implications of Rule 9 of the Customs
Valuation Rules or the GATT Valuation Rules.
3.
It was never the intention of the Board to “exempt”
ship demurrage charges from customs duty. Besides, the aforesaid clarificatory
letter proceeded on a premise that post-dispatch charges and ship demurrage are
to be similarly treated in the matter of valuation of imported goods. Importers
have, however, disregarded the letter in the matter of post-dispatch charges.
Wherever there is reduction of freight charges, the benefit by way of reduction
in the value of goods has been claimed by the importers and in certain cases
their claims also upheld by the Appellate Authorities (upto the level of CEGAT)
and some of these decisions have attained finality, although in one case an
appeal is pending in the Supreme Court.
4.
In the circumstances, it is considered advisable to
clarify that nothing contained in the earlier letter should be construed as
authorizing the exclusion of any ship demurrage charges paid which are required
to be included in the assessable value of goods under Section 14 of the Customs
Act, 1962 interalia by virtue of Rule 9(2) of the Customs Valuation Rules,
1988.
The earlier letter dated 14.8.1991 referred
in para 1 supra shall stand withdrawn.
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