2015 (7) TMI 26 - AT - Customs

Rejection of refund claim - Assessment of liquid cargo - manner of assessment - Assessment to be done on the invoice price when duty is payable on ad valorem basis and was to be done on shore tank quantity received when duty is payable on specific rate basis - Held that - the import of goods into India would commence when the same cross into the territorial waters but continues and is completed when the goods become part of the mass of goods within the country; the taxable event being reached at the time when the goods reach the customs barriers and the bill of entry for home consumption is filed. - in case of NOCIL (2002 (2) TMI 1316 - SUPREME COURT), the Hon ble Supreme Court affirmed that duty can only be charged on the quantity received in the shore tank. The same view has been reaffirmed by Tribunal in the cases of Ruchi Infrastructure Ltd. (2007 (11) TMI 210 - CESTAT, BANGALORE) and General Foods (2008 (5) TMI 546 - CESTAT, AHMEDABAD). The law as it exists clearly lays down that the value on which duty is payable will be the value of goods actually imported into the shore tanks. - Decided in favour of assessee.

Summary

Issues:
- Appeal against rejection of refunds by Commissioner (Appeals) for duty paid on liquid cargo import.
- Interpretation of Board Circulars 96/2002 and 6/2006 regarding assessment of duty based on shore tank quantity or invoice price.
- Application of Circulars in cases of duty assessed on ad valorem basis or specific rate basis.
- Retrospective application of Circulars.
- Legal examination of Customs Act provisions regarding duty assessment and tariff values.
- Relevance of quantity received in shore tanks for duty calculation.
- Comparison of transaction value and tariff value for duty assessment.
- Taxable event for import of goods under Customs Act.
- Precedents set by Tribunal and Supreme Court judgments in similar cases.

Analysis:
The judgment pertains to appeals challenging the rejection of refunds by the adjudicating authority for duty paid on liquid cargo import. The appellant, M/s Ruchi Soya Industries Ltd., claimed refunds based on discrepancies between the shore tank quantity received and the Bill of Lading quantity, contending that duty was overpaid. The dispute revolved around the application of Board Circulars 96/2002 and 6/2006. The appellant argued that Circular 6/2006, amending the assessment basis, was ultra vires and should not apply retroactively to their assessments made earlier. They relied on legal precedents and Commissioner's views to support their position.

The Tribunal analyzed the Customs Act provisions, specifically Sections 12, 14(1), and 14(2), to determine the appropriate basis for duty assessment. It emphasized the importance of the quantity received in shore tanks for duty calculation, citing the NOCIL case and subsequent Board Circulars. The judgment clarified that the assessment should align with the Customs Act provisions and relevant Circulars, distinguishing between duty assessed on ad valorem and specific rate basis.

Regarding the retrospective application of Circulars, the Tribunal ruled that the issue at hand must be decided based on existing law, irrespective of the Circular's timing. It highlighted the distinction between transaction value and tariff value under the Customs Act, emphasizing the relevance of the actual quantity imported for duty calculation. The judgment also discussed the taxable event for import of goods and upheld the legal precedents set by the Supreme Court and Tribunal in similar cases, affirming that duty should be charged based on the quantity received in shore tanks.

Ultimately, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief in accordance with the law. The judgment, pronounced on 9.2.2015, provides a detailed legal analysis of the issues involved, emphasizing the correct interpretation of Customs Act provisions and relevant Circulars in duty assessment cases involving liquid cargo imports.