2019 (12) TMI 653 - AT - Customs

Levy of NCCD - case of the department is that the NCCD should be levied on the quantity as per bill of lading and not on actual shore tank receipt quantity - whether National Calamity Contingent Duty levied at specific rates is to be levied on actual Shore Tank Receipt Quantity or on the basis of Ullage Report/Bill of Lading Quantity? HELD THAT - From the decision of the Tribunal in the case of BHARAT PETROLEUM CORPORATION LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI 2015 (2) TMI 127 - CESTAT MUMBAI which was upheld by Hon ble Supreme Court in COMMISSIONER VERSUS BHARAT PETROLEUM CORPORATION LTD. 2016 (5) TMI 552 - SC ORDER , it was clearly held that NCCD Duty which is levied at specific rates, it will be levied on the actual Shore Tank receipt Quantity - In the present case also the rate of NCCD is a specific rate and not Ad valorem. Therefore, the ratio of the above Judgment which finally settled by the Hon ble Supreme Court is squarely applicable in the present case. Therefore, the demand of differential NCCD based on Bill of Lading/Ullage Report is not sustainable. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Interpretation of National Calamity Contingent Duty (NCCD) levy based on Shore Tank Receipt Quantity versus Bill of Lading Quantity.

Analysis:
The central issue in this case revolved around the appropriate basis for levying National Calamity Contingent Duty (NCCD) - whether it should be calculated based on the actual Shore Tank Receipt Quantity or the Bill of Lading Quantity. The department contended that NCCD should be imposed according to the Bill of Lading Quantity, leading to a demand for duty on the differential quantity. On the other hand, the appellant argued that since NCCD is levied at specific rates, it should be payable based on the actual Shore Tank Receipt Quantity, citing relevant Board Circulars and legal precedents to support their position.

The appellant's representatives referenced Board Circulars, specifically Circular No. 34/2016-CUS and Circular No. 6/2006-Cus, which emphasized that for Bulk Liquid Cargo Imports, the shore tank receipt quantity should be the basis for duty levy, even when duty is specific. They also highlighted a previous case involving Bharat Petroleum Corporation Limited, where the issue was settled in favor of levying NCCD on actual Shore Tank Receipt Quantity. This decision was subsequently upheld by the Supreme Court, reinforcing the precedence for calculating NCCD based on the actual quantity received.

The Revenue, represented by Ld. Superintendent, relied on various judgments to support the impugned order, including Union of India Vs. Jain Shudh Vanaspati Ltd (1996), Mahindra & Mahindra Ltd Vs. CC (Import), Mumbai (2014), and Sandur Maganese & Iron Ores Ltd. Vs. CC, Chennai (2007). However, the Tribunal, in line with the Bharat Petroleum Corporation Limited case, reaffirmed that NCCD levied at specific rates must be based on the actual Shore Tank Receipt Quantity, not the Bill of Lading Quantity. The Tribunal's ruling, supported by the Supreme Court's decision, established a clear precedent that NCCD at specific rates should be calculated on the actual quantity received, rendering the demand based on Bill of Lading/Ullage Report quantity unsustainable.

In conclusion, the Tribunal set aside the demand and allowed the appeal, aligning with the established legal position that NCCD duty, when levied at specific rates, should be determined based on the actual Shore Tank receipt Quantity. The judgment, delivered by the Tribunal members, provided a definitive resolution to the issue at hand, emphasizing the significance of precedent and legal clarity in tax levies and duty calculations.