2017 (3) TMI 284 - AT - Customs

Valuation - import of crude oil - whether the crude oil imported by the appellant was liable to be assessed on the transaction value u/s 14 on the basis of Bill of Lading quantities or whether the duty is required to be assessed on the basis of crude oil pumped into the shore tank? - Held that - the issue is squarely covered in favor of the appellant by the decision of the Supreme Court in appellant s own case Mangalore Refinery And Petrochemicals Ltd. Versus Commissioner of Customs, Mangalore 2015 (9) TMI 245 - SUPREME COURT , where it was held that Quantity actually received into shore tank in port in India should be the basis for payment of Customs duty. Quantity shown in bill of lading cannot be used for this purpose as it does not reflect quantity of goods at the time and place of importation - the adjudicating authority are directed to re-determine the customs duty by adopting the shore tank quantity as opposed to the bill of lading quantity - appeal allowed by way of remand.

Summary

Issues involved:
1. Assessment of imported crude oil on transaction value basis.
2. Determination of customs duty based on shore tank quantity vs. Bill of Lading quantity.

Analysis:
Issue 1: Assessment of imported crude oil on transaction value basis
The appellant imported crude oil and filed a Bill of Entry for assessment, which was provisionally assessed pending production of original documents. The department found that the appellant made payments based on Bill of Lading quantity, which was considered as Free on Board (FOB) components for assessment under Section 14 of the Customs Act, 1962. The department demanded differential duty after finalizing the provisional assessment based on transaction value. The Order-in-Original and Order-in-Appeal upheld the department's decision. The appellant contended that the crude oil should be assessed based on the shore tank quantity, as clarified by a Circular and supported by a previous Supreme Court judgment in their favor. The AR agreed with the Supreme Court's decision in the appellant's case, leading to the Tribunal allowing the appeal and directing re-determination of customs duty based on shore tank quantity.

Issue 2: Determination of customs duty based on shore tank quantity vs. Bill of Lading quantity
The primary issue in this case was whether the crude oil imported should be assessed on the transaction value under Section 14 based on Bill of Lading quantities or on the quantity pumped into the shore tank. The appellant relied on a Supreme Court judgment in their favor and a subsequent Circular clarifying the assessment basis for bulk liquid cargo imports. The Tribunal, following the Supreme Court's decision, emphasized that the duty should be on goods brought into India, with the shore tank quantity being the appropriate basis for levy of customs duty. As a result, the Tribunal allowed the appeal and instructed the adjudicating authority to re-determine the customs duty using the shore tank quantity instead of the Bill of Lading quantity.