Why is shipping part of duty calculation?

I have been trying to find out why I keep getting charged customs duty on the shipping and insurance costs for personal goods I’m bringing into Cayman via a freight forwarder company. I’ve looked at the Customs Law and Customs Tariffs Law and cannot see anything about this. Is it even legal for Government to include duty for shipping and insurance costs as well as the goods themselves?

Read Auntie’s answer and comment on CNS Local Life