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2018 (2) TMI 655 - AT - CustomsLevy of duty - liquid bulk inputs - whether on the quality landed in India or the quality declared in the documents of inputs as loaded on the vessel? - Held that - identical issue decided in the case of Mangalore Refinery And Petrochemicals Ltd. Versus Commissioner of Customs, Mangalore 2015 (9) TMI 245 - SUPREME COURT , where it was held that a demand or duty on transaction value would be leviable in spite of ocean loss, it flies in the face of Section 23 of the Customs Act in particular, the general statutory scheme and Rules 4 and 9 of the Customs Valuation Rules. Valuation - includibility - charges that are recovered from the vessel after the arrival of goods at the Indian port - Held that - the issue decided in the case of C.C.E., Mangalore Versus Mangalore Refinery & Petrochemicals Ltd. 2016 (1) TMI 325 - SUPREME COURT , where it was held that The demurrage charges are admittedly incurred after the goods reached at Indian ports and, therefore, it is a post-importation event. Such charges, therefore, cannot form part of the transaction value. Appeal allowed - decided in favor of appellant.
Issues Involved: Determination of duty on liquid bulk inputs based on quality, inclusion of charges recovered post-arrival of goods at Indian port.
Issue 1: Levy of Duty on Liquid Bulk Inputs The appellant filed appeals against orders-in-appeal No. 320 & 321/2008 dated 19.12.2008. The primary issue to be determined was whether duty should be levied on liquid bulk inputs based on the quality landed in India or the quality declared in the documents of inputs as loaded on the vessel. Both parties agreed that the matter was covered by the decision of the Hon’ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Ltd. v. CC - 2015 (323) ELT 433 (S.C.). The Supreme Court held in favor of the appellant, emphasizing that customs duty, whether at a specific rate or ad valorem, is not leviable on goods that are pilfered, lost, or destroyed until a bill of entry for home consumption is made or an order to warehouse the goods is made. The Tribunal's reasoning that the basis for arriving at the quantity of goods imported changes based on the duty rate was deemed unsustainable. The circular dated 12th January, 2006, on which the revenue relied, was considered contrary to law. The Tribunal's decision to demand duty on transaction value despite 'ocean loss' was found to be against the Customs Act and the statutory scheme. Issue 2: Inclusion of Charges Recovered Post-Arrival The next issue revolved around the inclusion of charges recovered from the vessel after the arrival of goods at the Indian port. The Hon’ble Supreme Court settled this issue in the cases of Mangalore Refinery & Petrochemicals Ltd. and another case, where it was observed that demurrage charges incurred after the goods reached Indian ports were considered a post-importation event and therefore could not form part of the transaction value. The Supreme Court's decision in Commissioner of Customs, Ahmedabad v. M/s. Essar Steel Ltd., 2015 (319) E.L.T. 202 (S.C.) was cited to support this stance. Consequently, the issue was decided in favor of the appellant. In conclusion, the Appellate Tribunal CESTAT, Mumbai, under the leadership of Mr. Justice (Dr.) Satish Chandra, set aside the impugned order and allowed the appeals, providing consequential relief to the appellant. The judgments of the Hon’ble Supreme Court played a pivotal role in resolving the issues of duty levy on liquid bulk inputs and the inclusion of post-arrival charges, ultimately leading to a favorable outcome for the appellant in both aspects.
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