2001 (9) TMI 615 - AT - Customs

Summary

Issues:
1. Customs duty demand confirmation for Corn Soya Blend shortage.
2. Consideration of quantity shortage for End-Use Certificate.
3. Application of percentage loss allowance by Central Government.
4. Interpretation of quantity shortage calculation based on landed quantity.

Analysis:
1. The appeal was filed against the confirmation of a Customs duty demand for a shortage of Corn Soya Blend. The Appellant, a voluntary organization, argued that the shortage was due to damaged bags during operations, leading to spillage unfit for human consumption but suitable for animal use. They contended that the missing quantity was reconstituted loss mixed with foreign materials, making it impossible to obtain an End-Use Certificate for it. The Appellant also highlighted discrepancies between the Bill of Lading and the actual landing quantity, emphasizing that the shortage percentage was below the permissible limit set by the Central Government.

2. The Appellant presented evidence supporting the claim of short landing quantity, which, if considered, would bring the shortage percentage below the allowable limit specified by the Central Government. The Tribunal agreed with the Appellant that the shortage calculation should be based on the quantity of goods landed, not the quantity stated in the Bill of Lading. It was noted that once a quantity is short landed, it cannot be factored into the shortage calculation. The Tribunal found that the shortage had been incorrectly calculated based on the entire quantity mentioned in the Bill of Lading, leading to an erroneous confirmation of the duty demand.

3. The Appellant's argument regarding the allowance of a percentage loss on the total quantity imported, as specified by the Central Government, was crucial in determining the permissibility of the shortage percentage. By providing documentation to support the claim of short landing quantity, the Appellant demonstrated compliance with the percentage loss allowance, thereby challenging the basis for the Customs duty demand confirmation.

4. The Tribunal's decision to set aside the impugned order and allow the appeal with consequential relief was based on the acknowledgment that the shortage percentage should be calculated based on the quantity of goods landed, not the quantity indicated in the Bill of Lading. This interpretation aligned with the Appellant's argument and highlighted the importance of accurately determining quantity shortages to avoid unjust Customs duty demands.