2023 (11) TMI 484 - AT - Customs

Valuation of imported goods - assessment of bulk liquid cargo shown in the imported documents - whether the quantity shown in the import invoices and other related import documents be considered for assessment of bulk liquid cargo or the actual quantity received in the Shore Tank after import, be the basis for determination of value as well as duty? HELD THAT - This issue has been considered by the Hon ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd. 2015 (9) TMI 245 - SUPREME COURT after analysing the provisions of Customs Act, their Lordships observed 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. There are no merit in the impugned orders - the impugned orders are set aside - appeal allowed.

Summary

Issues involved: Assessment of bulk liquid cargo based on import documents vs. actual quantity received in Shore Tank.

Issue 1: Assessment of bulk liquid cargo

The appeals were filed against Order-in-Appeal No.96/2012 and No.97/2012 passed by the Commissioner of Customs (Appeals), Cochin, concerning the assessment of Methanol imported by the appellants. The assessments were finalized based on the quantity shown in the imported documents, leading to a confirmation of differential duty. The main issue revolved around whether the quantity shown in the import invoices should be considered for assessment or the actual quantity received in the Shore Tank after import. The appellant argued that recent judgments and circulars have clarified that the quantity received in the shore tank should be the basis for assessment. The Revenue, however, supported the findings of the Commissioner (A).

Issue 2: Legal principles and judgments

The Hon'ble Supreme Court's judgment in the case of Mangalore Refinery and Petrochemicals Ltd. was cited, emphasizing that the taxable event for imported goods is the moment they cross into territorial waters and become part of the mass of goods within the country. The Court highlighted that the quantity of goods at the time and place of importation should be considered for valuation, as per Sections 13 and 23 of the Customs Act. The Tribunal's reasoning, based on a misreading of Section 14 of the Customs Act, was deemed unsustainable. Following the Supreme Court's ruling, the Board issued Circular No.34/2016, which clarified that the quantity received in the shore tank should be the basis for customs duty payment. This principle was upheld in subsequent Tribunal cases, leading to the conclusion that the impugned orders should be set aside, and the appeals allowed with consequential relief.

Conclusion

In light of the legal principles established by the Hon'ble Supreme Court and subsequent circulars, the Tribunal found no merit in the impugned orders regarding the assessment of bulk liquid cargo. Consequently, the impugned orders were set aside, and the appeals were allowed with any necessary consequential relief as per law.