Landing charges are leviable as customs duty as part of the price or value of the goods.

SRINIVASAN, J.

The question that arises for consideration is whether the customs duty is leviable on landing charges as forming part of the price or value of the goods within the meaning of Section 14 of the Customs Act, 1962

2.The short facts relevant for the purposes of this case are as follows :

M/s. Shriram Fibres Limited, who is the petitioner in both the writ petitions imported several items including caprolactum. In W.P. No. 4103 of 1983 it imported a consignment of 2000 bags of caprolactum and the bill of entry dated 26-9-1981 was filed. The Assistant Collector of Customs fixed the notional landing charges at a percentage of .6% and arrived at the landing charges at Rs. 4, 762.74. He levied customs duty at the rate of 25% and c.v. duty at the rate of 28.5% plus 5% working out to Rs. 2, 972.25. The actual landing charges were Rs. 1, 216.51. The duty was paid and the goods were cleared but a claim for refund was made on 2-12-1982 before the Assistant Collector of Customs. Two grounds were urged viz., that the duty was not chargeable on the landing charges at all and the entire amount was refundable and alternatively even if duty was payable on landing charges there was no jurisdiction to levy on a notional basis and it should be done only on the basis of actual landing charges incurred. The Assistant Commissioner by his order dated 18-1-1983 accepted the second contention and directed a refund of Rs. 2, 212.35. Thus it was held that the petitioner was liable to pay a sum of Rs. 759.18 by way of customs duty on landing charges.

3.In the other writ petition No. 8177 of 1982 the petitioner imported 4, 000 bags of caprolactum and filed the bill of entry on 20-1-1981. The landing charges were worked out at Rs. 5, 761.97 whereas the actual landing charges was Rs. 2, 214.02. On a similar application for refund, the Assistant Commissioner granted a refund of Rs. 4, 255.47 leaving a balance of Rs. 1, 506.50. These amounts, which are in dispute in both the cases are not much but the question has a larger implication and it will be a recurring charge. Hence the petitioners are fighting the matter. Against the orders of the Assistant Collector, appeals were filed by the petitioner before the Collector of Customs in both the cases and they were rejected. Hence the petitioners are before this Court under Article 226 of the Constitution of India.

4.Section 12 of the Customs Act provides for levy of customs duty at such rates as may be specified under Customs Tariff Act, 1975 (Act 51 of 1975) or any other law for the time being on goods imported into and exported from India. The crucial words in this section are "imported into or exported from India". Section 14(1) reads thus :

"For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force where under a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be - -

(a) the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale :

Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50;

(b) where such price is not ascertainable, the nearest ascertainable equivalent thereof determined in accordance with the rules made in this behalf'.

5.It is the contention of learned counsel for the petitioner that under Section 12 the duty is leviable only on goods imported into India and the value of the goods must be fixed under Section 14 at the time and place of importation and, therefore, the landing charges which