2017 (5) TMI 1372 - AT - Customs

Valuation - Import of crude oil - finalization of provisional assessment on the basis of transaction value - 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 lower authorities are directed to redetermine the customs duty by adopting the shore tank quantity as opposed to the Bill of Lading quantity. Demurrage charges - includibility - Held that - the demurrage charges are admittedly incurred after the goods reached the Indian port and therefore it is a post-importation event. Such charges therefore cannot form part of the transaction value. Appeal allowed - decided partly in favor of appellant and part matter on remand.

Summary

Issues:
- Disposal of stay petition
- Appeal against impugned order
- Provisional assessment of imported crude oil
- Determination of customs duty based on Bill of Lading quantity
- Appellant's arguments on judicial precedents and circulars
- Inclusion of demurrage charges in assessable value
- Arguments by both parties
- Supreme Court decisions in favor of the appellant
- Redetermination of customs duty based on shore tank quantity
- Exclusion of demurrage charges from transaction value

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore pertains to the disposal of a stay petition where the issue involved was settled, leading to the appeal being addressed on its merits. The appeal was against an order passed by the Commissioner of Customs (Appeals) upholding the Order-in-Original, which confirmed the differential duty demanded by the department. The case revolved around the provisional assessment of imported crude oil by the appellant, based on the Bill of Lading quantity, leading to a discrepancy in the duty calculation. The department demanded the differential duty, which was upheld in the impugned order.

The appellant argued that the impugned order contradicted binding judicial precedents and a circular by the Board. They contended that the value of the imported crude oil should be determined based on the quantity received in the shore tank, citing a Supreme Court decision and a Board circular supporting their stance. The appellant also highlighted a previous Tribunal order in their favor for a similar issue. On the other hand, the respondent reiterated the findings in the impugned order, advocating for the assessment based on the Bill of Lading quantity and inclusion of demurrage charges in the assessable value.

After considering the submissions and various decisions cited, the Tribunal found in favor of the appellant. They relied on two Supreme Court decisions in the appellant's own case, emphasizing that the quantity received into the shore tank should be the basis for customs duty payment, not the Bill of Lading quantity. The Tribunal also ruled that demurrage charges incurred post-importation cannot be part of the transaction value, citing another Supreme Court case. Consequently, the Tribunal allowed the appeal, directing the authorities to redetermine the customs duty based on the shore tank quantity and excluding demurrage charges from the transaction value. The appeal was allowed by way of remand, and the stay application was disposed of accordingly.