Judgment:
1. The above 9 appeals have been preferred by the Department against the order of the Collector of Customs (Appeals) dated 21-3-1990, holding that landing charges should be calculated on actuals for determining the assessable value. The respondents herein had registered their purchase order under Project Import Regulations, 1965 for substantial expansion of their Visakha Refinery Expansion Project. The bills of entry were provisionally assessed under project imports and on completion of the project, the importer submitted the necessary documents for finalisation, claiming actual landing charges. The Assistant Collector finalised the bills of entry on the basis of notional landing charges at the rate of 1.3 per cent being added to the CIF value. The lower appellate authority held as follows : "Once it is agreed that landing charges are includible in the assessable value, the next question is whether the quantum should be decided with reference to actuals as certified by Port Trust or at the notional rate fixed by customs. The lower authority has cited the decision of CEGAT in rejecting the proposition based on actuals.
It however appears, the spirit of the CEGAT judgment is for not re-opening the cases when the bills of entry are already assessed finally on the basis of notional rate, which would lend to lot of avoidable administrative routine and not commensurate with the small refund amounts involved. The judgment however does not preclude grant of refund on the basis of actuals when for some other reasons the value and original assessment were on provisional basis and bills of entry are still open for final assessment. In the present cases the bills of entry were assessed under Project Contract Regulations under provisional duty procedure. These bills of entry are in any case have to be taken up for final evaluation, both on value and duty aspects. The ends of justice would demand that at such stage, the landing charges also should be reckoned at actuals for determining the assessable value". Hence these appeals.
2. We have heard Smt. S. Baliga, learned SDR for the Department and Shri R. Ganapathi Subramanian, Chief Tax Manager of the respondent corporation and considered various orders of the Tribunal on the issue of basis of inclusion of landing charges. A reading of the earlier orders of the Tribunal make it clear that there is no prohibition of including actual landing charges for determining the assessable value.
In the case of MRF Ltd. v. Collector of Central Excise, Madras [1987 (31) E.L.T. 313], it was held that the appellants have not substantiated their calculations of landing charges actually paid by them. In the case of Deepak Fertilizers and Petrochemicals Corporation Ltd. v. Collector of Customs [1989 (41) E.L.T. 550], the Tribunal held that the importers have not made out a case for adding actual charges instead of notional flat rate of 0.75 per cent as landing charges since they have not even shown that there are actual charges different from the notional charges. In the case of Ceat Tyres v. Collector of Customs [1990 (49) E.L.T. 387], the Tribunal rejected the claim for inclusion of actual landing charges on the ground of want of evidence of payment of actuals. In the case of Collector of Customs v. India Polyfibres [1988 (38) E.L.T. 517], the reasoning behind assessment on the basis of notional landing charges was set out as follows : "4. We cannot support the learned Appellate Collector's order for the simple reason that it would make the working of the assessment procedures almost impractical. We have already stated in the preceding paragraph that the actuals are not known in advance when duties are assessed and paid. If the respondent's point were to be accepted, lakhs of assessments all over the country would have to be made on provisional basis. The statutory provisional assessment procedure itself involves complicated formalities, including execution of a bond and giving of bank guarantee/security etc. After the actuals become available, such lakhs of assessments would have to be re-opened, resulting in refunds or recoveries. Rare cases apart, the amounts involved in each individual case would be very small. This is so because the landing charges themselves form only a fraction of the import price and the difference between the average amount and the actual amount would further be a fraction of that fraction. A Division Bench of the Hon'ble Gujarat High Court [1982 (10) E.L.T. 203 (Guj.)] Prabhat Cotton & Silk Mills Ltd. v. Union of India, had an occasion to comment adversely on the litigation involved in numerous challenges to validity of inclusion of landing charges in the customs assessable value. The considerations which had weighed with the Hon'ble High Court, inter alia, were enormous number of cases on the one hand (running into hundreds of thousands) and pettiness of the amounts involved in individual cases on the other. We observe that while the amounts, by way of a fraction of the landing charges themselves, would, by and large, be still more tiny in individual cases, the number of consignments imported over the years has grown. We hear almost every day the trade and industry clamouring for simplification of procedures in our country. And yet in the present case the respondents ask us to support undoing of a simplification which, by a practice accepted since over a century, has become an established part of the customs assessment. We see nothing wrong or illegal in averaging of the landing charges. The interpretation of law has to be a practical one. Taken as a whole, neither the Government nor the importers stand to lose or gain. We see no reason, therefore, to upset the existing procedure and thereby add enormous amount of infructuous work for the customs houses as well as for lakhs of importers." 3. This view was followed by the Tribunal in a recent decision in the case of Collector of Customs v. Hindustan Zinc (Order No. 1590 to 1609/90-A dated 15-11-1990). From the above, it is obvious that there is no prohibition on inclusion of landing charges at actuals for determining the assessable value.
4. In these cases, the bills of entry have only been provisionally assessed and have yet to be taken up for final assessment. In these circumstances, we direct that the bills of entry should be finally assessed including actual landing charges for determining the assessable value. For the reasons set out above, we uphold the impugned order and dismiss the appeals.