2018 (3) TMI 877 - AT - Customs

Duty demand on crude oil based on Bills of Lading quantity - Whether the appellant has discharged the customs duty on the crude oil which was imported by them? Held that - the issue is now squarely settled by Hon ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Limited Vs. CC, Mangalore 2015 (9) TMI 245 - SUPREME COURT , where it was held that If the goods are pilferred after they are unloaded or lost or destroyed at any time before clearance for home consumption or deposit in warehouse, importer is not liable to pay duty leviable on such goods - customs duty needs to be worked out only on the basis of the quantity of crude oil received in the shore tanks - appeal disposed off.

Summary

Issues:
1. Discharge of customs duty on imported crude oil.
2. Discharge of NCCD cess.
3. Calculation of duty based on Bill of Lading quantity versus quantity received in shore tank.

Issue 1: Discharge of Customs Duty on Imported Crude Oil

The appeals were against Orders-in-Appeal regarding the customs duty on imported crude oil. The appellant imported crude oil through Visakhapatnam Port and discharged the duty liability under provisional assessment of Bill of Entries. The lower authorities considered the quantity imported as per Bill of Lading quantity, while the appellant argued that the quantity to be considered should be the quantity received in the shore tank. The main contention was whether the duty should be based on the Bill of Lading quantity or the actual quantity received.

Issue 2: Discharge of NCCD Cess

The appellant did not contest the demand of NCCD cess and duty on demurrage charges before the higher authorities. The committee of disputes did not grant permission to contest the NCCD cess issue. As a result, the demand for cess and duty on demurrage charges was upheld along with interest.

Issue 3: Calculation of Duty Based on Quantity

The key issue was whether the customs duty should be calculated based on the Bill of Lading quantity or the quantity received in the shore tanks. The appellant cited a Supreme Court judgment in the case of Mangalore Refinery & Petrochemicals Limited which supported their argument that the duty should be based on the quantity received in the shore tanks. The Tribunal agreed with the appellant, holding that the duty should be worked out only on the basis of the quantity of crude oil received in the shore tanks, not the Bill of Lading quantity. Consequently, the impugned order confirming the duty demands based on Bill of Lading quantity was deemed unsustainable.

In conclusion, the Tribunal disposed of the appeals by upholding the demand for cess and duty on demurrage charges, while ruling in favor of the appellant regarding the calculation of customs duty based on the actual quantity of crude oil received in the shore tanks. The judgment provided clarity on the method of calculating customs duty on imported goods, emphasizing the importance of considering the actual quantity received rather than the quantity mentioned in the Bill of Lading.