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2023 (3) TMI 843 - AT - CustomsValuation of import goods - Levy of custom duty on the value determined on the quantity received in Shore Tanks as claimed by the Appellants or on transaction value based on invoice price of the overseas suppliers - bulk liquid cargo imports of Motor Spirit (MS) - whether the cargo is chargeable to ad valorem rate of duty or to specific rate of countervailing duties? HELD THAT - The issue is no longer res integra as the same has been decided by the Hon ble Supreme case in the of MANGALORE REFINERY AND PETROCHEMICALS LTD. VERSUS COMMISSIONER OF CUSTOMS, MANGALORE 2015 (9) TMI 245 - SUPREME COURT where it was held that the quantity of crude oil actually received into a shore tank in a port in India should be the basis for payment of customs duty. Consequential action, in accordance with this declaration of law, be carried out by the customs authorities in accordance with law. A The appellant s claim of payment of Customs duty on quantity received in shore tank is correct and legal and revenue claim of duty payment on transaction value based on invoices of all overseas suppliers is not sustainable - appeal allowed.
Issues Involved:
1. Whether customs duty on bulk liquid cargo imports of Motor Spirit (MS) is payable on the quantity received in shore tanks or on the transaction value based on the invoice price. 2. Whether additional duty of Rs. 2/- per litre under the Finance Act should be included in the basic customs duty for calculating Countervailing Duty (CVD) on imported petroleum products. Summary: Issue 1: Customs Duty on Bulk Liquid Cargo Imports The primary issue was whether customs duty for Motor Spirit (MS) imports should be based on the quantity received in shore tanks or the transaction value from the invoice price. The appellant argued that this issue had already been settled by the Hon'ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Ltd. - 2015 (323) ELT 433 (S.C), which held that customs duty is leviable on the actual quantity received in shore tanks. The Tribunal noted that the Supreme Court's judgment clarified that the levy of customs duty under Section 12 of the Customs Act applies only to goods imported into India, and the quantity for duty purposes should be the actual quantity received in shore tanks. Consequently, the Tribunal set aside the impugned order and allowed the appeal, affirming that customs duty should be based on the shore tank quantity. Issue 2: Inclusion of Additional Duty in Basic Customs Duty for CVD CalculationThe second issue was whether the additional duty of Rs. 2/- per litre under the Finance Act should be included in the basic customs duty for calculating CVD. The Tribunal referred to its earlier decision in the case of Indian Oil Corporation Ltd. vs. C.C., Kandla, which followed the precedent set in Hindustan Petroleum Corporation Ltd. vs. C.C., Kandla - 2012 (384) ELT 534 (Tri-Ahmd.). The Tribunal held that the additional duty must be added to the basic customs duty for computing CVD. However, to ascertain the correct amount of CVD, the matter was remanded to the original authority. Conclusion:The Tribunal concluded that the appellant's claim of paying customs duty based on the shore tank quantity was correct and legal, while the revenue's claim of duty payment based on the invoice transaction value was not sustainable. The impugned order was set aside, and the appeal was allowed accordingly. (Pronounced in the open court on 17.03.2023)
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