2019 (5) TMI 927 - AT - Customs

Finalization of provisional assessment - value to be adopted for assessment of liquid bulk cargo - HELD THAT - The bills of entry were finalised by levying duty on the value in the invoice which reflects the quantity loaded at the port of origin. The Hon'ble Supreme Court examined the several provisions in Customs Act, 1962 and, based on the legal position that levy of customs duty is restricted to goods that are brought into India, that the taxable event is the import of goods, that import duty is not leviable on goods that are lost, pilfered or destroyed, and that the measure of value of imported goods cannot be delinked from the contextual of time and place of import, has held that the duty liability is to be ascertained only on the quantity received in the shore tank. Appeal allowed - decided in favor of appellant.

Issues:
1. Dispute over the assessment of differential duty on finalization of assessment for imports covered by bills of entry.
2. Controversy regarding the quantity of liquid bulk imports subject to customs duties based on load port quantity or shore tank quantity.
3. Interpretation of circulars issued by the Central Board of Excise and Customs determining levy at effective rate of duty and distinguishing liquid bulk imports chargeable on specific rate and ad valorem rates.
4. Application of the decision of the Hon'ble Supreme Court in Mangalore Refinery & Petrochemicals Ltd v. Commissioner of Customs on the levy of customs duty on imported goods.
5. Adherence to circulars by lower authorities in finalizing provisional assessments.
6. Value to be adopted for assessment of liquid bulk cargo - quantity loaded at the port of origin or quantity received in the shore tank.

Analysis:

1. The appeal involved a dispute over the assessment of differential duty on finalization of assessment for imports covered by bills of entry. The issue revolved around the quantity of liquid bulk imports subject to customs duties, with customs authorities relying on the load port quantity, while importers argued for liability based on the quantity received in the shore tank. Circulars issued by the Central Board of Excise and Customs played a crucial role in determining the levy at the effective rate of duty and distinguishing liquid bulk imports chargeable on specific rate and ad valorem rates.

2. The Hon'ble Supreme Court's decision in Mangalore Refinery & Petrochemicals Ltd v. Commissioner of Customs was cited, emphasizing that the levy of customs duty is restricted to goods brought into India, and the taxable event is the import of goods. The Court highlighted that import duty is not leviable on goods lost, pilfered, or destroyed, and the value of imported goods must be linked to the time and place of importation. This decision influenced the interpretation of the quantity to be considered for duty liability, favoring the quantity received in the shore tank over the load port quantity.

3. The lower authorities, bound by the circulars of the Central Board of Excise and Customs, finalized provisional assessments based on the load port quantity. However, the Supreme Court's ruling necessitated a reevaluation, leading to the nullification of the circulars relied upon by the lower authorities. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, emphasizing the importance of assessing duty liability based on the quantity received in the shore tank for liquid bulk cargo.

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