2019 (2) TMI 778 - AT - Customs

Levy of Differential Customs Duty - short landing of goods imported - the transaction value remained constant - Held that - The issue is no more res integra and considered by Hon ble Supreme Court in Mangalore Refinery & Petrochemicals Ltd. s case 2015 (9) TMI 245 - SUPREME COURT , where it was held that the quantity of crude oil actually received into shore tank in port in India should be basis for payment of customs duty - demand of differential duty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Levy of duty on short quantity of imported goods despite constant transaction value.

Analysis:
The appeal was filed against an order-in-appeal passed by the Commissioner of Customs (Appeals), Mumbai, regarding the import of bulk oil falling under Chapter 27 of the Customs Tariff Act, 1975. The appellant was alleged to have short paid duty, leading to a show cause notice for recovery of differential duty. The demand was reduced on adjudication but confirmed on the quantity short received. The appellant contended that the levy of duty on short quantity of goods imported, with a constant transaction value, is no more res integra and cited a judgment of the Hon'ble Supreme Court. The issue in question was whether differential duty could be imposed on short landing of goods imported, even if the price declared in the invoices remained the same. The Tribunal, in line with the Supreme Court judgment, emphasized that import duty is leviable only when goods are out of customs and in the hands of the importer, and the quantity of goods imported should be based on what is actually received into a shore tank in a port in India. The Tribunal set aside the impugned order and allowed the appeal based on the principles established in the Supreme Court case.

The judgment delved into the legal aspects surrounding the valuation of imported goods for the purpose of levying customs duty. It highlighted the importance of considering the quantity of goods at the time and place of importation, emphasizing that the bill of lading quantity may not accurately reflect the goods imported. The Tribunal criticized the revenue's reliance on a circular that was deemed contrary to the law and reiterated that customs duty is not leviable on goods that are lost, pilfered, or destroyed until they are out of customs and in the possession of the importer. The judgment clarified that the basis for customs duty calculation should be the actual quantity of goods received in India, and not based on the bill of lading quantity. By setting aside the Tribunal's judgment and declaring the correct basis for payment of customs duty, the judgment established a clear legal precedent for valuation of imported goods and duty calculation, in line with the statutory provisions and Customs Valuation Rules.