M/S COROMANDAL FERTILISERS LTD.versusCOLLECTOR OF CUSTOMS

               MIS COROMANDAL FERTILISERS LTD.                                    A
                                      v.
                      COLLECTOR OF CUSTOMS

                          DECEMBER 14, 1999

              [S.P. BHARUCHA AND R.C. LAHOTI, JJ.]                                B

      Customs duty-Assessment of-Landing charges-Assessed at a
percentage-Assistant Collector adding stevedoring charges separately-
Held, Landing charges cover the totality of all that an importer expends to
bring imported goods to land-It is open to customs authorities not to assess C
landing charges at a percentage and to assess them at actuals-But if they
do assess them on a percentage basis, they cover 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 the same was not covered under the landing
charges.                                                                     D~

     CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2233-42
of 1988.

      From the Judgment and Order dated 30.10.87 of the Customs, Excise and
Gold (Control) Appellate Tribunal, New Delhi in A. No.C/1086/79-A, and C/         E
1895 to 1903/83-A with C/COD/554 to 562/86-A. and C/Misc/269/86-A

                                   WITH

     Civil Appeal No. 4307 of 1996.

      From the Judgment and order dated 5.12.95 of the Customs, Excise and        F
Gold (Control) Appellate Tribunal, New Delhi in A No. C/2237/86-A in Order
No. 962 of 1995-A.

    S. Ganesh, Ravinder Narain, Janesh Baweja and S. Sukumaran for Mis.
JBD & Co., for the Appellant.
                                                                                  G
     N.K. Bajpai, Hemant Sharma and P. Parmeshwaran for the Respondent.

     The following Order of the Court was delivered :               ~

     A brief question arises in these appeals, namely, having, for the purposes
                                     329
                                                                                  H
    330                      SUPREME COURT REPORTS [1999] SUPP. 5 S.C.R.

A 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
B 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
C 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,
D 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
E
    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
F   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.
G
          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 cIF value.
    We do not think that we have received any satisfactory answer to the
H   question at the conchi!:ion of the hearing.
              CORO MAND AL FERTILISERS LTD. v. COLLECTOR OF CUSTOMS                 331

            Mr. Bajpai referred to Section 42 of the Major Port Trusts Act, 1963 and        A
      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               B
      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.                                    c
            "Landing charges" are exactly what the words mean, the expenditure
      incurred by an importer for bringing goods on 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.            D
      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     E
      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.
                                                                                            F
            It our view, the submission made on behalf of the appellants is
      unexceptionable. It is open to the Customs authorities not to assess landing
      charges at a percentage and to assess them at actuals. But if they do assess
      them on a percentage basis, they cover thereby all aspects of landing charges
      and it is not open to them then to seek to add any amount thereto on the              G
      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.
---   RP.                                                             Appeals allowed.      H