CASE NO.: Appeal (civil) 2233-42 of 1988 PETITIONER: COROMANDAL FERTILISERS LTD. RESPONDENT: COLLECTOR OF CUSTOMS DATE OF JUDGMENT: 14/12/1999 BENCH: S.P. BHARUCHA & R.C. LAHOTI JUDGMENT:
JUDGMENT
1999 Supp(5) SCR 329
The following Order of the Court was delivered :
A brief question arises in these appeals, namely, having, for the purposes
of assessment of Customs duty, assessed landing charges at the rate of 1.4
per cent of the CIF value of imported goods, can the Customs authorities
also add to their value stevedoring charges.
The appellants manufacture fertilizers. For this purpose they imported
large quantities of rock phosphate and sulphur. The said goods were brought
to India in chartered ships arranged by the M.M.T.C., the canalising agency
at the relevant time, namely, 1971 to 1975. The said goods were purchased
by the appellants on the high seas. The responsibility of unloading the
said goods in India was theirs. For the purpose of efficient unloading; the
appellant maintained their own wharf at Visakhapatnam, unloading equipment
and staff for the same.
Landing charges of the said goods were assessed at 1.4 per cent of the CIF
value thereof The Assistant Collector said that the 1.4 per cent landing
charges did not include stevedoring charges and he added them separately,
calculating them upon the basis of, inter alia, unloading labour charges,
Customs staff overtime, port hire charges for dinning hall, fuel,
electricity, depreciation, approximate maintenance cost, administrative
overheads and notional interest on capital. He found that the stevedoring
charges ranged between Rs. 5.86 to Rs 9.42 per metric tonne of the said
goods.
The appellants succeeded before the Appellate Collector, who took the view
that landing charges and stevedoring or unloading charges were one and the
same. The Customs authorities challenged the correctness of his order
before the Customs, Excise and Gold (Control) Appellate Tribunal and it is
the order of the Tribunal which is now in question before us. According to
the Tribunal, the 1.4 per cent landing charges already added to the value
of the said goods comprised wharfage charges and conveyance charges from
the wharf to the transit sheds but not the unloading charges from ship to
berth. The unloading charges had, therefore, in its view, to be computed
and added on and they could only be computed, as had been done by the
Assistant Collector, but with some marginal difference.
We asked Mr. Bajpai, learned counsel for the Customs authorities,
repeatedly how stevedoring or unloading charges could be added on the value
of goods when the Customs authorities had already loaded the value of goods
with landing charges at the rate of 1.4 per cent of their GIF value. We do
not think that we have received any satisfactory answer to the question at
the conclusion of the hearing. Mr. Bajpai referred to Section 42 of the
Major Port Trusts Act, 1963 and submitted, quite rightly, that the Board of
Trustees of a major port furnish a variety of services, including
receiving, removing, shifting, transporting, storing and delivering goods
brought within their premises. In his submission, in this particular case,
the 1.4 per cent landing charges did not include charges for unloading the
said goods. Unloading the said goods had been done by the appellants
themselves at the wharf that they had hired, using their own equipment and
their own staff. Therefore, the charges on this account, called stevedoring
charges, had to be added, irrespective of the fact that 1.4 per cent
landing charges had already been added. Mr. Bajpai further submitted that
the Customs authorities would be in great difficulty if in each case the
actual landing charges had to be ascertained and charged.
“Landing charges” are exactly what the words mean, the expenditure incurred
by an importer for bringing goods oh board ship to land. Landing charges,
in law, must be assessed on actuals, but, as a matter of practice,
particularly to facilitate expenditious clearance, landing charges are
assessed at a percentage of the value of the goods and such assessment is
accepted. When so assessed, landing charges cover the totality of all that
an importer expends to bring imported goods to land.
In the present case, the Customs authorities assessed the landing charges
that the appellants incurred at 1,4 per cent of the CIF value of the goods.
There is no objection by the appellants to this. It is not their case that
such percentage exceeds the costs in this behalf that they have actually
incurred and that they should get a refund. What they do contend is that
the 1.4 per cent landing charges represent all that they have had to expend
to bring the said goods to land and that, therefore, no addition of
stevedoring or unloading charges can be made.
It our view, the submission made on behalf of the appellants is
unexceptionable. It is open to the Customs authorities nor to assess
landing charges at a percentage and to assess them at actuals. But if they
do assess them on a percentage basis, they coyer thereby all aspects of
landing charges and it is not open to them then to seek to add any amount
thereto on the basis that this or that or the other was not covered
thereby.
In the result, .’the Civil appeals are allowed. The order under challenge
is set aside. The respondents shall pay to the appellants the costs of the
appeals.