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TMI Blog2015 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... y was different when compared to the facts of the present case where the rate of duty is ad valorem. When the rate of duty is ad valorem and payment is made for the bill of lading quantity without any adjustment in value for the various losses, it is on the transaction value that the duty liability has to be discharged and not on the basis of the quantity of bulk liquid cargo which is actually received. As regards the various case laws relied upon by the appellant, we find that they are not relevant to the facts of the present case before us. However as regards NCCD duty which is levied at specific rates, the above analysis will not apply and they will have to be levied on the actual shore tank receipt quantity and we hold accordingly. - Following decision of MANGALORE REFINERY & PETROCHEM. LTD. Versus CC, MANGALORE [2006 (2) TMI 518 - CESTAT, BANGALORE]. Whether ship demurrage charges are includible in the assessable value of the goods imported - this matter was referred to the Larger Bench for consideration in view of conflicting decisions in the matter in the case of Grasim Industries Ltd. (2013 (10) TMI 246 - CESTAT AHMEDABAD). The larger Bench noted that rule 10(2) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Nos. 229-231/MCH/AC/Oil Unit/2013 dated 21-03-2013 passed by the Commissioner of Customs (Appeals) Mumbai Zone I, New Custom House, Mumbai. Vide the impugned order, the ld. Lower appellate authority upheld the finalisation of assessments in respect of bulk oil and other products falling under Chapter 27 of the Customs Tariff imported by the appellant during the period from 1996 to 2004 and 2004 to 2006 vide orders dated 1-2-2012 and 28-2-2011 respectively on the basis of the transaction value demands of ₹ 44,41,67,992/- and ₹ 9,00,34,465/- respectively and quantified the excess duty payments at ₹ 22,38,92,934/- and ₹ 4,66,24,271/- respectively. Further vide order dated 7-2-2012, the adjudicating authority also appropriated an amount of ₹ 7,47,06,660/- towards the pending dues from the refunds due to the appellant, M/s Bharat Petroleum Corporation Limited (BPCL in short). Aggrieved of the same, the appellant is before us. 2. The submissions made by the ld. Counsel for the appellant can be summarized as follows:- (i) The assessment of imported bulk cargo (crude oil falling under CTH27.07) should be done on the basis of shore tank quantity and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said duty, shore tank quantity becomes relevant and has to be charged only on that basis. (v) While finalising the provisional assessment, excess duty paid should be adjusted against the less duty paid in respect of a few bills of entry and reliance is placed on a few decisions of this Tribunal, namely, BSL - , Apar Industries Ltd. - , Toyota Kirloskar Auto Parts Pvt. Ltd. [2012 (276) ELT 322 (Kar)] and HPCL [Final Order No. A/1181-1183/13/CSTB/C-I dated 16-5-2013]. (vi) Refunds arising out of finalisation of provisional assessment should be granted suo motu without filing separate refund claim and the directions issued for filing refund claims separately is contrary to the settled position in law in this regard. Reliance is drawn from the decisions of this Tribunal in MRPL case [2014 (300) ELT 159] and IOCL case [2012 (282) ELT 368 (del)]. (vii) No interest is payable in the present case as the imports were prior to July, 2006 but finalized after July, 2006. Sub-section (3) to section18 of the Customs Act enabling levy of interest on differential duty on account of finalisation of assessment came into force only on 13-7-2006 and hence no interest is payable prior to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the quantity received. In the said case it was held that when the levy is ad valorem, the amount paid or payable on bill of lading quantity is the transaction value and if duty is discharged on such value, that would be the proper discharge of duty irrespective of the actual quantity received, whether it is more or less than the bill of lading quantity. In the said decision, the Tribunal further observed that the Tribunal decision in the case of the said assessee reported in 2002 (141) ELT 241 did not examine the valuation aspect and the only issue before the Tribunal was only whether duty was payable on the quantity ascertained by ullage survey or the quantity received in shore tank and the decision was rendered following the decision in the HPCL case reported in 2001 (13) ELT 139 (T), which was not relevant at all. The 2002 decision in appellant's own case was rendered in the context of specific rate of duty. Further the hon'ble apex court in the Surya Roshni Ltd. case [2000 (41) RLT 249 (SC)] had held that transit losses, for which payments were made by the assessee to the customers as compensation for the losses cannot be deducted from the assessable value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regime, whether duty liability has to be determined on the basis of transaction value paid or payable for the supply of goods or the duty liability should be determined on the basis of the shore tank receipt quantity? (2) Whether ship demurrage charges are includible in the assessable value of the goods imported? (3) In the case of provisional assessment of duty which is finalised subsequently, whether short payment of duty made in respect of some bills of entry can be adjusted against excess payments made in respect of some other bills of entry and whether separate refund claims should be filed for refund of excess payments? (4) Whether the principles of unjust enrichment would apply when refund arises on account of finalisation of provisional assessements under section 18 of the Customs Act? (5) Whether any interest liability accrues prior to July, 2006 in case of finalisation of provisional assessments? I. In the context of an ad valorem tax regime, whether duty liability has to be determined on the basis of transaction value paid or payable for the supply of goods or the duty liability should be determined on the basis of the shore tank receipt quantity? 4.2 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refineries. The foreign supplier supplied crude as per the Bill of Lading quantity. M/s IOC made payment to the foreign supplier on the basis of the Bill of Lading quantity, even though, the quantity received in India might be less on account of ocean loss. On the basis of the apportionment, M/s IOC prepared derived Bill of Lading in respect of each refinery. M/s MRPL made the payment to IOC on the basis of the quantity shown in that derived Bill of Lading. Other refineries also followed the same practice. In terms of decided case laws and Board's Circular, in respect of liquid bulk cargo, the quantity of goods imported was equivalent to the quantity received in shore tank. The ocean loss was proportionately shared by all the refineries concerned. The point at issue was the valuation of the crude imported by MRPL. According to Revenue, irrespective of the quantity of crude received by the appellant in the shore tanks, they had to pay duty on the basis of the amount paid to IOC. On the other hand, the appellants contended that duty was payable only on the value of the crude received in the shore tanks. In other words the appellants wanted to pay duty only on the actual quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty on goods pilferaged after their unloading and before the proper officer has made an order for clearance for home consumption or deposit in a warehouse. But if the goods are restored to the importer after pilferage he has to discharge the duty liability. In order to emphasis the point that no duty need be paid on goods not received, the learned Advocate has referred to Section 13 Section 23. We want to make it clear that it is not the question of demanding duty on goods not received. But it is the demand of duty on the transaction value. In spite of the ocean loss, the appellant has to make payment on the basis of the Bill of Lading quantity. Therefore this is the case where the transaction value arrived at based on the Bill of Lading quantity is payable as price for the quantity received in shore tank. .......................................................................... 10. The adjudicating authority relied on the decision of the Tribunal in the case of Exim India Oil Co. Ltd. (supra) wherein it has been held as follows: 9. As regards the ocean loss we find that the Hon'ble Supreme Court in the case of CCE v. Surya Roshni Ltd. - 2000 (122) E.L.T. 3 (S.C.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question for consideration is whether ship demurrage charges are includible in the assessable value of the goods imported. Revenue has relied on the decision of this Tribunal in the case of Seven Seas petroleum and the Board's circular dated 2-3-2001 to canvass its case. However, we find that this matter was referred to the Larger Bench for consideration in view of conflicting decisions in the matter in the case of Grasim Industries Ltd. (supra). The larger Bench noted that rule 10(2) of the Customs Valuation Rules, 2007, which was pari material with Rule 9 (2) of CVR, 1988, added an explanation specifically including ship demurrage charges, lighterage or barge charges in the cost of transport of imported goods. Therefore, for the period prior to 2007, the said charges were not includible even if the assessments were made provisionally. This larger bench decision prevails over other decisions of this Tribunal. In the present case, this period involved is prior to 2007. Consequently, it has to be held that ship demurrage charges are not includible in the assessable value of the imported goods prior to CVR, 2007 coming into force and we hold accordingly. III. In the case of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e else. Explaining further the Supreme Court observed, The doctrine of 'unjust enrichment', therefore, is that no person can be allowed to enrich enquitably at the expense of another. A right of recovery under the doctrine of 'unjust enrichment' arises where retention of a benefit is considered contrary to justice or against equity. The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasicontract or the doctrine of restitution. Reference was made to Fibrosa vs. Fairbairn, (1942) 2 All ER 122 to the judgment of Lord Wright and in case of Nelson vs. Larholt, (1947) 2 All ER 751 to the judgment of Lord Denning. Lord Denning had observed The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution if the justice of the case so requires. Lord Wright observed The remedy in case of unjust enrichment in English law is generically different from the remedies in contract or in tort, and is recognized to fall within a third category of the common law which has been called quasicontract or restitution. Summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that if the final assessment order is modified at the instance of the importer the modified order does not represent the final assessment order. In other words, if a final assessment order is modified at the instance of the importer, then, the refund arising on final assessment order as well as the additional refund arising on modification of the final assessment order would be governed by Explanation II to Section 27 of the Customs Act. Therefore, there is no distinction between refund arising on finalisation of provisional assessment and refund arising after finalisation of provisional assessment and both refunds are subject to the provisions of Section 27 of the Customs Act. A Special Leave Petition filed against the judgment was dismissed by the Supreme Court. See 2004 (164) ELT (A) 177 (SC). .............................................................................. 21. It would, thus, be clear that what was under the consideration was the provisions of the Central Excise Act 1944 and Rules framed thereunder as in 1986. This is not an authority for the proposition that in case of provisional assessment under the Customs Act, the doctrine of unjust e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that what is required to be done by the assessee is to pay the duty short paid and separately claim refund of the duty paid in excess . Since the issue of unjust enrichment has to be considered, it obviously follows that each transaction has to be examined separately and therefore, there cannot be any clubbing of clearances. Accordingly we answer the question in favour of revenue and against the appellant. IV Whether any interest liability accrues prior to July, 2006 in case of finalisation of provisional assessments? 4.5 We find that this issue has been answered in favour of the appellant and against Revenue in the decisions of this Tribunal in the case of Sterlite Industries and Raj Petroleum Products Ltd. where in it was held that prior to 13-7-2006 there was no provision for demand of interest on differential duty on finalisation of provisionally assessed bill of entry. Levy of Interest is substantive in character and therefore, in the absence of specific provisions, the demand for interest cannot be made and we hold accordingly. 4.6 The appellant has also raised a contention that the principle of unjust enrichment is not applicable to oil marketing companies as th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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