Circular No. 764/80/2003-Central Excise 3

4th  December, 2003

Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Judicial Cell, North Block, New Delhi

Subject : Inclusion of Ship Demurrage (Ship Detention charges) in the assessable value of imported goods.

Kind attention is invited to the judgment of the Hon’ble Supreme Court in the case of Commissioner of Customs, Chennai vs. M/s. Yeses International [2001 (133) ELT 526 (SC)], on the above subject. As indicated in Para 6 of the said judgment, as regards the demurrage charges, counsel for the Department had stated that they cannot be included in the assessable value.

In this regard, it is to be informed that on the issue of inclusion of Ship Demurrage (Ship Detention charges), on an application filed by the Department seeking clarification on the above order, the Hon’ble Supreme Court has vide order dated 13.10.2003 (copy enclosed) clarified that the judgment dated 08.10.2001 in regard to the demurrage is based on the facts of this case as also on a concession made by the counsel appearing for the revenue and that the question of law pertaining to the demurrage has not been decided in the said judgment.

It is requested to bring this clarificatory order of the Hon’ble Supreme Court to the notice of all the Commissioners under your charge advising them not to decide the other cases on the issue in the light of the above judgment of the Hon’ble Supreme Court. It is also to be informed that appeal filed by the Department on this issue, in another case of M/s Indian Oil Corporation is pending for consideration before the Hon’ble Supreme Court.

B.K. Gupta
Joint Secretary (Review)

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