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TMI Blog2014 (4) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... nal assessment orders, the quantity of LNG declared in the bills of entry and the import manifest was to be taken for the purpose of payment of duty as there was no flow meter available at the port of import and quantity cannot be based on the post-discharge survey report. So far as paying duty on the basis of unit price as per the Final Invoice, it was argued that in two bills of entry as per Final Assessment Order dt. 1.5.2013 the unit price remained unchanged whereas in Bills of Entry covered by Final Assessment Order dt. 5.6.2013, the unit price was reduced which was not correct. It was his case that the quantity of LNG declared in the Bills of Lading and Load Port Ullage report should be taken as quantity imported into India as per Section 2 (27) of the Customs Act, 1962. He relied upon the following case laws :- a) Mapsa Tapes Pvt. Ltd. Vs Commissioner of Central Excise & Customs Delhi [2009 (247) ELT 188 (Tri.Del.)] b) Pride Foramer Vs UOI [2002 (148) ELT 19 (Bom.)] It was also his case that it is not known as to whether the LNG tankers as the vessel w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (present respondent) are relevant and are reproduced below : 7. CONTRACT PRICE The Contract Price in US Dollars per MMBtu for LNG purchased and sold pursuant to a Transaction shall be as specified in the relevant Confirmation Notice. The amount payable by Buyer for LNG purchased and sold pursuant to a Transaction shall be determined in accordance with Clause 16. 16. INVOICING AND PAYMENT 16.1 Promptly after Completion of Unloading of the LNG Ship at Buyer's Facilities, Seller or its representative shall provide to Buyer a certificate of volume (in cubic meters) unloaded, together with such other documents concerning the LNG unloaded as may reasonably be requested by Buyer for the purpose of its resale arrangements. Buyer shall, as soon as reasonably possible but in any event not later than forty-eight (48) hours after Completion of Unloading, cause to be completed a laboratory analysis to determine the quantity of the LNG unloaded (in accordance with the provisions of Clause 15) and provide to Seller or its representative a certificate with respect to such LNG quality. Buyer shall as soon as reasonably possible afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atriated by the Respondent to the seller of the LNG abroad. Respondent also relied upon the case law of Mangalore Refinery & Petrochem Ltd. Vs Commissioner of Customs, Mangalore (supra). Paras 6 & 7 of the same are relevant and are reproduced below :- 6. We have gone through the records of the case carefully. Dispute in this case is the correct valuation of crude petroleum imported by the appellants. The payment made by the appellants is based on the Bill of Lading quantity, despite the fact that the quantity received in the shore tank is less than the Bill of Lading quantity. The difference is normally attributable to various losses which occur from the time of loading at the foreign port till their receipt in the shore tanks of the appellants. There is no reduction in the price payable for the petroleum crude on account of the losses. Suppose the Bill of Lading quantity is 1000 Metric Tones (MTs) and what is received in the shore tank is 999 MTs. The appellant has to make payment for the entire 1000 MTs of the product. Revenue contends that the duty has to be paid on the total payment made by the appellant irrespective of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of all bulk liquid cargo imports, the short tank receipt quantity should be taken as the basis for levy of Customs duty. We re-iterate that this position is not disputed by the Revenue so long as the duty is at specific rate. When duty is based on some amount per metric tone, quantity received in shore tanks become relevant making provisions of Section 14 on Customs Valuation irrelevant in such cases. In other words, neither the Tribunal decision cited supra, nor the Board Circular would be relevant when the levy is on ad valorem basis. When the levy is on ad valorem basis, Section 14 of the Customs Act comes into play. In the present case, the price actually paid or payable is on the basis of the Bill of Lading quantity. On account of the losses, the appellant is not entitled for any reduction in price. In that case, the amount paid or payable on the Bill of Lading quantity is the transaction value for the purposes of Customs duty irrespective of the fact that the quantity received in the shore tank is different from the Bill of Lading quantity. In a product like petroleum crude, due to various causes, losses occur. This is considered natural. That is the reason for not giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular No. 96/2002-Customs, dated 27-12-2002. Attention so invited to the Board's Circular No. 96/2002-Customs, dated 27-12-2002 on the above mentioned subject, wherein, it was conveyed that, in the case of bulk liquid cargo imports, whether for home consumption or warehousing, the shore tank receipt quantity should be taken as the basis for levy of customs duty. 2. A doubt has arisen in cases where customs duty is chargeable on ad-valorem basis, whether there would be any requirement for determination of the quantity of the goods as the basis for levy of customs duty would be the transaction value, i.e. invoice price and not the quantity. 3. The above issue has been under consideration for a long time and a number of assessments are pending at field level because of divergent views. The above issue was discussed in the Conference on 'Customs Valuation and Customs Procedures' held on 21st and 22nd August, 2003 and also in the Chief Commissioners conference on Customs Valuation held on 1st October, 2005 at Mumbai. The conference was of the view that the assessment of bulk liquid cargo should be based on invoice price, which is the price paid or payable for the imported goods, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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