2011 (3) TMI 1405 - HC - Central Excise

Import of goods shortage of goods imported demand of differential duty amount on the differential quantity of 10.187 MTs of edible oil - Relying on the circular of Central Board of Excise and Customs (C.B.E. & C.) being No. 96 of 2002, dated 27-12-2002, Commissioner of Appeals set aside adjudication order dated 27-12-2007 - As per the circular, in case of bulk liquid cargo imports, shore tank receipt quantity should be taken as the basis for levy of customs duty, circular issued by the C.B.E. & C. shall come into effect from the date it was issued and not from the date when it is notified by way of public notice, whole objective of such circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purposes of excise duty. It does not lie in the mouth of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision, appeal dismissed

Summary

Issues:
- Appeal under Section 130 of Customs Act, 1962 against order of Customs, Excise and Service Tax Appellate Tribunal.
- Differential duty on imported edible oils due to discrepancy in quantity.
- Interpretation of circular issued by Central Board of Excise and Customs regarding levy of customs duty on bulk liquid cargo imports.

Analysis:
1. The appeal before the High Court was filed by the Commissioner of Central Excise, Visakhapatnam-II Commissionerate, challenging the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) related to the imposition of differential duty on imported edible oils. The dispute arose from a discrepancy between the quantity declared in bills of entry and the actual quantity discharged from vessels at Kakinada Port.

2. The respondent, an importer of edible oils, faced an adjudication by the Assistant Commissioner of Customs, Kakinada-I Division, due to the differential quantity of oil discharged. The Assistant Commissioner directed the payment of additional duty on the shortfall. However, the Commissioner of Customs and Central Excise (Appeals) set aside this order based on a circular issued by the Central Board of Excise and Customs (C.B.E. & C.) in 2002, which specified the basis for levy of customs duty on bulk liquid cargo imports.

3. The key point of contention revolved around the effective date of the C.B.E. & C. circular, with the Adjudicating Authority determining it to be from the date of notification within the Commissioner's jurisdiction. In contrast, the Commissioner of Appeals and CESTAT held that the circular should be effective from its date of issuance, not notification. This interpretation was supported by the legal precedent set in Ranadey Micronutrients v. C.C.E., emphasizing the importance of uniformity and adherence to circulars issued by the Board.

4. The High Court, noting that the legal position was not seriously disputed by the appellant, dismissed the appeal in limine. This decision underscores the significance of following circulars issued by the competent authorities for maintaining consistency and discipline in matters related to the levy of customs duty on imported goods, particularly in cases of discrepancies in quantities declared during importation.