2017 (7) TMI 673 - AT - Customs

Valuation - imported bulk liquid edible oil - finalisation of provisional assessment - Revenue is aggrieved by the assessment based on shore tank quantity and not on shore ullage quantity - Held that - It is noted that Commissioner(Appeals) in the impugned order has admitted that shore tank quantity should have been adopted, however, as no shore tank quantity was available, Bills of Entry were finalised as per old procedure i.e. shore ullage quantity - the shore tank quantity should have been the basis for arriving at assessable value and the customs duty liability on the imported goods - appeal allowed. Valuation - imported Soyabean oil in bulk - The grievance of the appellants herein is that dip reading should have been taken only after 48 hours, after the liquid is get stabilised. Since the reading has been taken within 48 hours, there is a difference in total quantity because of turbulence and foam - Held that - Circular No.96/2002-Cus issued by the CBEC, while advising assessment of such bulk quantity cargo to be done on the basis of shore tank receipt, does not however give any guidelines as to the time, manner and method of such measurement of the quantity in shore tank quantity. However, the very same Public Notice No.2/2002 relied upon by lower appellate authority, in para 8, thereof lays down that the dip and temperature of the cargo in shore tank shall be taken after cargo is settled - the percentage difference on account of such disputed measurements ranges between 0.003% to 0.26% only, which in our view is not very substantial. Such minor percentage differences can very well be attributed due to the presence of foam and added turbulence, proximate to discharge of the bulk edible oil cargo to the shore tank. Hence both on the manner and method of taking the dip measurement as also taking account the relatively low alleged difference in quantity, we find in favor of the importer - appeal allowed. Valuation - edible oil discharged directly into the refinery tank of the appellants - Held that - where bulk edible oil cargo is warehoused and discharged directly into the shore tank, the aforesaid Board circular provides and facilitates for the shore tank measurement to be taken and adopted for the purposes of finalisation of assessment, instead of ship ullage quantity. But where the importer chooses to get such cargo directly pumped into their own tanks in the refinery and file Bill of Entry for clearance for home consumption, it would not be practical for customs officers to have the dip measurement of the quantity received in refinery in their presence for the purposes of arriving at actually received quantity. It is for this reason only that the CBEC in its wisdom has advised that in such cases, only the ship ullage quantity will continue to be adopted as the quantity imported for the purposes of assessment. In consequence, we fail to find any merit in these appeals - appeal dismissed. Condonation of delay in filing appeal - Section 128(1) of the Customs Act, 1962 - Held that - As per the proviso to that sub-section, the Commissioner(Appeals), if he satisfied that the appellant was prevented by sufficient cause in presenting the appeal within such period of 60 days to allow it to be presented within a further period of 30 days. Thus the appeal before the Commissioner(Appeals) cannot be filed beyond the limitation period of 90 days - there is no provision whatsoever in the Customs Act, 1962 for further relaxation of the period allowed for filing appeal under Section 128 ibid - COD application dismissed. Appeal allowed - decided partly in favor of appellant.

Issues:
1. Dispute on the measurement of quantity of imported edible oil.
2. Finalization of provisional assessment based on shore tank quantity.
3. Dip reading timing for stable liquid in the shore tank.
4. Quantity assessment for edible oil directly discharged into the refinery tank.
5. Appeal dismissal due to delayed filing.

Issue 1: Dispute on the measurement of quantity of imported edible oil

In the case of bulk liquid edible oil imports, the dispute centered around the method of measurement for customs duty assessment. The Circular No.96/2002-Cus issued by the CBEC mandated that the quantity as measured in the shore tank should be considered for assessment. The Tribunal upheld this position, citing previous judgments such as Acalmar Oils & Fats Ltd. and CC, Visakhapatnam Vs. Adani Wilmer Ltd. It was established that the shore tank receipt quantity should be the basis for levy of customs duty for bulk liquid cargo imports, rather than relying on the ship ullage quantity. Consequently, the impugned orders in favor of adopting shore tank quantity for assessment were sustained.

Issue 2: Finalization of provisional assessment based on shore tank quantity

Regarding the finalization of provisional assessment for imported edible oil warehoused and cleared for home consumption, the Tribunal examined the appeal filed by the importer. The contention was that assessment should be based on shore tank receipt quantity as per CBEC Circular No.96/2002. The Tribunal agreed with the importer, emphasizing that the shore tank quantity should have been the basis for determining the assessable value and customs duty liability. As a result, the importer's appeal was allowed with consequential benefits.

Issue 3: Dip reading timing for stable liquid in the shore tank

In cases where Soyabean oil was imported in bulk and warehoused, the appellants raised concerns about the timing of dip reading for stable liquid in the shore tank. They argued that readings should be taken after 48 hours to allow for stabilization and to account for turbulence and foam. The Tribunal supported the importer's position, noting that the dip reading should indeed be taken after the liquid stabilizes. The minor percentage differences in quantity due to foam and turbulence were considered insignificant, leading to the allowance of the appeals filed by the importers.

Issue 4: Quantity assessment for edible oil directly discharged into the refinery tank

For appeals related to the quantity of edible oil discharged directly into the refinery tank, the Tribunal examined the methodology for assessment. The impugned orders followed the procedure outlined in CBEC's circular, which allowed for assessment based on ship's ullage survey report in specific scenarios. As the importer chose to have the cargo pumped directly into their tanks for home consumption, the Tribunal found no merit in the appeals challenging the use of ship ullage quantity for assessment. Consequently, these appeals were dismissed.

Issue 5: Appeal dismissal due to delayed filing

One appeal was filed against the dismissal by the lower appellate authority due to delayed filing. The Tribunal highlighted the statutory provisions under Section 128 of the Customs Act, 1962, which set a limitation period for filing appeals. As there was no provision for further relaxation of the filing period, the appeal was dismissed for being beyond the statutory limitation period.

In conclusion, the Appellate Tribunal CESTAT HYDERABAD addressed various issues related to the measurement and assessment of imported edible oil, emphasizing the importance of following prescribed guidelines and circulars for customs duty determination. The judgments provided clarity on the methodology for quantity measurement, assessment criteria based on shore tank quantity, and adherence to statutory limitations for appeal filings.

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