Hon'ble Judges/Coram:
B.N. Kirpal, A.P. Misra and R.P. Sethi

ORDER

B.N. Kirpal, J.

1. The main question which arises in all these appeals by special leave is whether while assessing customs duty payable in respect of imported goods, the customs authorities can add/include landing charges in arriving at the value of those goods. The facts which are relevant for deciding the issue are similar. For the sake of convenience we will refer to the facts in the case of Garden Silk Mills Limited in greater detail.

2. The appellants in these appeals had imported polyester yarn from abroad. The transactions for sale and purchase between the foreign supplier and the appellant company were in the nature of CIF contracts i.e. price included costs, insurance and freight charges. These contracts normally provide CIF price for the port of discharge. It is not in dispute that under a CIF contract the price which was paid included not only the cost of the goods but also the insurance and freight charges.

3. The customs authorities, in determining the value of the goods for the purpose of ascertaining the amount of duty payable, added to the CIF price the landing charges which were paid to the Port Trust Authorities. On the payment of the customs duty being made, the goods were cleared and used by the appellants.

4. The appellant company then filed writ petitions in the High Court of Gujarat, inter alia, contending that the landing charges which were paid at the rate 3/4% of the CIF value of goods had been wrongly added while arriving at the assessable value of those goods and, therefore, the High Court should direct a refund of Rs. 69030.60 which was the amount of duty relatable to the landing charges. The High Court came to the conclusion that the Customs Authorities had rightly added the landing charges to the CIF value of the goods for the purpose of determining the customs duty and, therefore, no refund was due to the appellants. Hence, these appeals by special leave.

5. Section 12 of the Customs Act, 1962 (hereinafter referred to as "the Act") provides for the levy of duty of customs on the goods imported into or exported from India at such rates as may be specified under the Customs Tariffs Act, 1975. Prior to its amendment in 1988, Section 14 of the Act read as follows:

14. Valuation of goods for purposes of a........