Circular No. 29/2004-Cus.
dated 13-4-2004
F.No. 467/05/2000-Cus.IV
Government of India
Ministry of Finance (Department of Revenue)
Central Board of Excise & Customs, New Delhi
Subject : Customs Valuation Rules, 1988 -Inclusion of barging/lighterage charges in the assessable value – Regarding.
Representations have been received in the Board to clarify whether barging/lighterage charges are includable in the assessable value of the imported goods as “extended cost of transportation” under Rule 9(2)(a) of the Customs Valuation Rules, 1988 or the same are covered under the 1% “landing charges” levied by the Department under Rule 9(2)(b) of the Customs Valuation Rules, 1988. It has been reported that the standard practice is to include the same in the assessable value, except in the case of Mumbai Custom House.
Due to non-availability of deep 2. draught all ports are not navigable up to the Jetty and therefore the goods have to be discharged/transhipped at the outer anchorage. Further, in many busy ports, goods are off-loaded at the anchorage on barges in order to ease the congestion in the docks. Odd dimensional cargo/heavy lifts/hazardous cargo often has to be off-loaded at anchorage for technical/safety reasons. Such charges associated with the delivery of cargo at outer anchorage are known as barging/lighterage charges. The Tariff Conference held at Chennai in January 2000 observed that the freight charges to be added to the assessable value shall include all elements of cost incurred in the transportation of the goods from the point of exportation to the place of importation, i.e., the final jetty at which the goods are unloaded.
The issue was examined in 3. consultation with the Ministry of Law. The Law Ministry has observed that the Hon’ble Supreme Court’s observations in the case of M/s. Garden Silk Mills Limited v. Union of India reported in 1999 (113) E.L.T. 358 (S.C.) appears to be more relevant that the value of goods is deemed to be the price at which such goods are ordinarily sold or offered for sale, for delivery at the time and place of importation in the course of international trade. The importation is complete when the goods reach the landmass of the Country and not at the outer anchorage point. In other words, all the expenses incurred by the importer in bringing the goods to the landmass of the country will be includible in the assessable value. It is understood that some of the importers are filing declaration of value as CIF/C&F in spite of the fact that the said “freight” paid by the Shipper does not include the barging/lighterage charges. Taking a cue from the Supreme Court judgment in the Garden Silk Mills case cited above, the above charges borne by the importer in bringing the goods from the outer anchorage to the landmass has to be included in the assessable value as “extended cost of transportation” under Rule 9(2)(a) of Customs Valuation Rules, 1988. The 1% landing charges collected by the department under Rule 9(2)(b) of Customs Valuation Rules, 1988, are towards the loading, unloading and handling charges at the place of importation, which is the landmass of the Country. Mis-declarations, if any, may be proceeded against, in accordance with law.
Difficulties, if any, in 4. implementing the Circular may be brought to the notice of the Board forthwith.
Representation against misuse of Free Trade Agreements to be made to Commerce Ministry and for under-valuation or evasion of duty to Finance Ministry
