2016 (5) TMI 739 - AT - Customs

Valuation - Whether the ullage survey report has to be taken into consideration for the purpose of calculating the Customs duty or is it the actual quantity of imported oil at the shore which is to be considered - Held that - the issue stands decided in favour of the assesse by a recent decision of the Hob ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Ltd. Vs. C.C. 2015 (9) TMI 245 - SUPREME COURT . Therefore, by relying on the same, no import duty can be levied on the goods lost, pilfered or destroyed during transportation and it is the actual quantity received at the shore which would attract duty. Valuation - Whether the ship demurrage charges paid by the assesse is required to be included in the transaction value or not - Held that - the issue stands decided by the Larger Bench decision of the Tribunal in the case of Commissioner of Customs, Jamnagar Vs. Grasim Industries Ltd. 2013 (10) TMI 246 - CESTAT AHMEDABAD . Therefore, by relying on the same, the ship demurrage charges were includable in the assessable value for discharge of Customs duty only with effect from the date of coming into force of 2007 Valuation Rules. Inasmuch as in the present appeals, the period is much prior to the above date, so, we hold in favour of the assessee. - Decided in favour of appellant with consequential relief

Summary

Issues:
1. Consideration of ullage survey report for calculating Customs duty.
2. Inclusion of ship demurrage charges in the transaction value for Customs duty.

Analysis:

1. Ullage Survey Report for Customs Duty Calculation:
The first issue in the present appeals revolves around whether the ullage survey report should be considered for calculating Customs duty or if the actual quantity of imported oil at the shore should be the basis. Both parties agree that a recent decision by the Supreme Court in the case of Mangalore Refinery & Petrochemicals Ltd. Vs. C.C., Mangalore [2015 (323) E.L.T. 433 (S.C.)] has settled this matter in favor of the assessee. The Supreme Court held that import duty cannot be imposed on goods lost, pilfered, or destroyed during transportation, emphasizing that the duty should be levied based on the actual quantity received at the shore. This legal principle guides the decision-making process in this case.

2. Inclusion of Ship Demurrage Charges in Transaction Value:
The second issue concerns whether the ship demurrage charges paid by the assessee should be included in the transaction value for Customs duty calculation. This matter has been addressed by a Larger Bench decision of the Tribunal in the case of Commissioner of Customs, Jamnagar Vs. Grasim Industries Ltd. [2013 (296) E.L.T. 39 (Tri. - L.B.)]. The Tribunal ruled that ship demurrage charges are to be considered in the assessable value for Customs duty only from the date of the 2007 Valuation Rules coming into force. Since the period in question in the present appeals predates the aforementioned date, the decision is made in favor of the assessee. Consequently, the impugned orders are set aside, and all the appeals are allowed, granting consequential relief to the appellants.

In conclusion, the judgment by the Appellate Tribunal CESTAT Bangalore addressed two critical issues related to Customs duty calculation, relying on established legal precedents to deliver a decision that favored the assessee on both counts. The detailed analysis of each issue and the application of relevant case law ensured a fair and just outcome in this legal matter.