Circular No. 26/2006-Customs
Government of India
Ministry of Finance
Department of Revenue
26th September 2006
Subject: Includibilty of ship demurrage charges in the assessable value regarding/-
Attention is invited to the Board’s Circular issued vide F.No. 467/79/2005-Cus.V, dated 12.01.2006 [Circular No.05/2006] on the above subject, wherein, it was conveyed that all pending provisional assessments in respect of importation prior to 02.03.2001 may be finalised by not including ship demurrage charges in the assessable value in the light of the Hon’ble Supreme Court judgement in the case of M/s. Indian Oil Corporation [2004 (165) ELT (SC)], as the Department’s Review Petition against the same was dismissed.
2. It was further stated in the said Circular that with regard to the period after 02.03.2001, clarification would be issued in due course. The Board has examined the matter. In the aforesaid case of M/s. Indian Oil Corporation, the Apex Court had held that the existing Departmental Circular would be binding on the Department. The Board vide Circular no. 14/2001-Cus.V dated 02.03.2001 had conveyed that ship demurrage charges are required to be included in the assessable value of the goods under Section 14 of the Customs Act, 1962, inter alia, by virtue of Rule 9 (2) of the Customs (Valuation) Rules, 1988. Therefore, in the light of the aforesaid Apex Court’s judgement, read with the Board’s aforesaid Circular no. 14/2001-Cus. Dated 02.03.2001, all pending provisional assessments in respect of the importation on or after 02.03.2001 should be finalised by including the ship demurrage charges in the assessable value of the imported goods.
3. Similarly, the current assessments may also be finalised by including the ship demurrage charges in the assessable value of the imported goods.