Freight Insurance cost not includible in ATF Duty Calculation for Aircraft Fuel Tanks

Commissioner of Customs Vs Indian Airlines Ltd (CESTAT Delhi)

The Commissioner of Customs vs. Indian Airlines Ltd case, adjudicated by CESTAT Delhi, revolves around the calculation of duty concerning Aviation Turbine Fuel (ATF) consumed in aircraft fuel tanks. The contentious issues include the inclusion of freight, insurance, and landing charges in the duty assessment.

The Commissioner of Customs initially held ATF liable for confiscation under specified sections of the Customs Act and confirmed a substantial duty demand. However, the appeal raised two main points:

1. Redemption Fine: The Commissioner’s decision not to impose a redemption fine due to the unavailability of the goods physically.

2. Inclusion of Additional Charges: Whether freight, insurance, and landing charges should be added to the FOB value for duty assessment.

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