2008 (1) TMI 249 - AT - Customs

Demand raised on ground that quantity received in storage tank at factory is less than the quantity delivered at port allegation of non-utilization of imported good crude oil in mfg. of refined oil Circular 96/02 had clarified quantity received in the shore tank of the importer was the imported quantity relevant for assessment - As the quantities received in the shore tank were utilized for the intended purpose, demand raised by denying benefit of exemption not. 16/2000 is not justified

Summary

Issues:
1. Differential duty demand on short-received imported oil under concessional rate of duty.
2. Interpretation of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996.
3. Quantity relevant for assessment in case of imported bulk liquid cargo.
4. Applicability of Board's Circular No. 96/2002-Cus.
5. Legal position on quantification of bulk liquid cargo for assessment.

Analysis:
1. The case involved a dispute over the demand for differential duty on 22.975 MTs of imported crude sunflower oil, short-received at the factory of the importer, who availed a concessional rate of duty under Notification No. 16/2000-Cus. The Assistant Commissioner demanded Rs.80,108/- towards differential duty, which was contested by the importer. The Commissioner of Central Excise (Appeals) found in favor of the importer, stating that the imported oil was utilized for the intended purpose, following precedents set by Tribunal decisions and CBEC Circular No. 96/2002-Cus.

2. The appellant argued that the quantity relevant for assessment should be based on the quantity received in the shore tank of the importer, as per the Tribunal's decisions and the CBEC Circular. They contended that the demand for differential duty was incorrect as the imported quantity was used for the intended purpose of manufacturing refined oil. The legal position was supported by the Apex Court's judgment and the Board's Circular, clarifying the assessment criteria for bulk liquid cargo imports.

3. The Tribunal analyzed the Board's Circular and previous decisions in similar cases to determine the relevant quantity for assessment of imported bulk liquid cargo. It was established that the shore tank receipt quantity should be the basis for levy of customs duty, whether for home consumption or warehousing. The Tribunal referenced specific cases where the shore tank receipt quantity was considered the imported quantity for assessment, leading to the dismissal of the demand for differential duty on the short-received oil in the present case.

4. Relying on the legal interpretations provided by the Tribunal and the Apex Court, the judgment highlighted that the imported quantity, as received in the importer's storage tank (shore tank), should be considered for assessment purposes. The decision emphasized that the shortage in the imported quantity was not valid grounds for demanding differential duty, especially when the imported goods were used for their intended purpose, as clarified by relevant legal precedents.

5. In conclusion, the Tribunal dismissed the appeal filed by the Revenue, upholding the impugned order that favored the importer. The judgment reinforced the legal position on the quantification of bulk liquid cargo for assessment, emphasizing the significance of the shore tank receipt quantity in determining customs duty liability for imported goods.