2025-VIL-740-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Imports gold/silver dore bars under actual user license (import authorization), Demand of differential customs duty, Assessable value – Appellant imported gold/silver dore bars from various foreign suppliers under actual user license - Demand for differential customs duty on the ground that the assessable value declared was lower than the final invoice value, and metal lease charges and insurance premium were not included in the assessable value – Demand invoking extended period of limitation under Section 28(4) of the Customs Act and penalty under Section 114A on the ground of wilful misstatement or suppression of facts – HELD - The extended period of limitation and penalty under Section 114A could not be invoked as there was no evidence of wilful misstatement or suppression of facts by the appellant. The appellant had paid excess duty in some cases where the gold content in the final invoice was less than that mentioned in the finalized Bills of Entry, indicating that there was no motive to suppress the final invoice value - The appellant had also claimed refund of excess duty paid, which further negated any intention to evade duty - the appeal is partly allowed by setting aside the invocation of the extended period of limitation and imposition of penalty under Section 114A, but upholding the inclusion of metal lease charges and insurance premium in the assessable value – The appeal is partly allowed - Whether the metal lease charges were correctly included in the assessable value – HELD - As per the agreements, the title of the imported goods remained with the foreign suppliers, and the appellant was treated as a bailee. The metal lease charges were paid as a condition of sale and not as interest on deferred payment, and hence, were rightly included in the assessable value - In view of the specific terms of the Agreement and the stand taken by the appellant before the RBI, it is clear that metal lease charges were not in the nature of interest. The Principal Commissioner, therefore, was justified in upholding the demand of differential duty on metal lease charges - Whether the insurance premium was correctly included in the assessable value – HELD - As per the agreements, the appellant was required to get the goods insured and pay the insurance premium as a bailee of the goods, and hence, the insurance premium was a "condition of sale" and rightly included in the assessable value under the Customs Valuation Rules. This finding recorded by the Principal Commissioner is based on the Agreement and does not suffer from any illegality as the appellant was required to get the goods insured and pay insurance premium in terms of the Agreement as a bailee of the goods.
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