Rimjhim Ispat Ltd. Vs Commissioner of Customs (Preventive) (CESTAT Kolkata)
In Rimjhim Ispat Ltd. Vs Commissioner of Customs (Preventive), the dispute concerned whether freight and insurance charges should be included in the assessable value of imported Ferro Silicon under Rule 10(2) of the Customs Valuation Rules, 2007. The appellant imported goods from Bhutan through a land border and declared only FOB value, contending that FOB and CIF values were effectively the same due to absence of transit distance and insurance requirement.
The department alleged that the appellant failed to include freight and insurance, leading to short payment of IGST, and invoked Rule 10(2) to add 20% of FOB as freight and 1.125% as insurance. The adjudicating authority confirmed the demand along with interest and penalty, alleging willful misstatement and suppression.
On merits, the Tribunal held that the appellant failed to provide documentary evidence to substantiate the claim that FOB value included all costs or that transportation cost was nil. Invoice terms indicated that goods were dispatched at buyer’s risk and responsibility ceased at the exporter’s premises, supporting the department’s view that freight and insurance elements were includible. Accordingly, the Tribunal found merit in applying Rule 10(2) where costs were not ascertainable.
