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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 ..... er vide order dated 7-2-2012, the adjudicating authority also appropriated an amount of Rs. 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 not on the basis of transaction value. Reliance is placed on the CBEC circular dated 27-12-2002 wherein it has been clarified that in case of all 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. The subsequent CBEC circular dated 12-1-2006 directing finalisation of assessments on the basis of transaction value is prospective in nature and cannot be applied retrospectively for the period prior to 12-1-06. In appellant's own case vide Order dated 2-5-2003 [2003 (158) ELT 221], this Tribunal had held that store tank quantity should be the basis of assessment. The said decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 that date. Support is drawn from the decisions of this Tribunal in the case of Sterlite Industries Ltd. [2008 (223) ELT 633] and Raj Petroleum Products Ltd. [2013 (292) ELT 125]. (vii) Unjust enrichment is not applicable in respect of refunds arising on finalisation of provisional assessment for imports made prior to 13-7-2006 and finalised after 13-7-2006 and principle of unjust enrichment is not applicable to oil marketing companies. Reliance is placed on the decisions in the case of Napino Auto & Electronics Ltd. - and IOCL [2012 (282) ELT 368 (Del)], and Final Order No. 1183/13/CSTB/C-I dated 16-5-2013. (ix) The ratio of the decision in the case of HPCL (2013 (291) ELT 230 (Tri.-Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 the goods. The ratio of the above decisions apply to the facts of the present case. Further, in Apar Industries Ltd. case this Tribunal had held that circular dated 12-1-2006 interprets the law as per its understanding and since earlier circular was silent on the aspect of valuation, it cannot be said that a different view has been taken for the earlier period. It was further held in the said case that the circular dated 12-1-2006 would apply for past imports also. (c) As regards the abatement sought with regard to demurrage charges, the ld. Special Consultant submits that the said issue was considered by this Tribunal in the Seven Seas Petroleum Ltd. case [2005 (191) ELT 1181] and by a majorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 As regards this issue, we should bear in mind that the rate of duty was ad valorem during the period of imports in the present case and the appellant was required to pay to the foreign supplier the value agreed upon for the bill of lading quantity even though the actual quantity received could be less due to ocean and other losses or due to natural causes and the appellant was not entitled for any deduction in the value on bill of lading quantity. As regards the reliance placed by the appellant on the decision in appellant's own case vide order dated 2-5-2003, the imports in the said case pertained to the period 1992-97 and the rate of duty was specific during most of the period of imports. Thus the factual and le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 received in the shore tanks despite the fact that they had to make payment to IOC on the basis of the quantity shown in the derived Bill of Lading. This Tribunal held as follows in the said case:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.) = 2000 (41) RLT 249 (S.C.) has laid down that the transit losses, for which payments are made by the assessee to the customers as compensation for losses cannot be deducted from the assessable value of the goods. By applying the ratio of the said decision to the facts of the instant case and by keeping in mind that it is the entire quantity inclusive of losses which is being purchased by the appellants from M/s. IOC and for which full payments are being made by the appellants to M/s. IOC we hold that such losses are not permissible deductions." In the above mentioned case, the Tribunal has relied on Apex Court decision in Surya Roshni's case wherein it was held that compensation to customers for breakage and losses in goods in tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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? Whether the principles of unjust enrichment would apply when refund arises on account of finalisation of provisional assessments under section 18 of the Customs Act? 4.4 These two questions need to be considered together as they are interlinked. The appellant has relied on the decisions of this Tribunal in the case of BSL, HPCL, MRPL and IOCL and the Karnataka High Court decision in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. However, Revenue relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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." Summing up, the Supreme Court observed "From the above discussion, it is clear that the doctrine of 'unjust enrichment' is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/appellant to show that he has paid the amount for which relief is sought, he has not passed on the burden on consumers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 enrichment will not apply considering Sections 27(2), (3) of the Customs Act. The doctrine of unjust enrichment will only apply when the assessment is finally completed. There can be no application for refund before the final assessment is made. 22. Insofar as the Customs Act, 1962 is concerned, under Section 27(3), no refund of duty and interest can be made without satisfying the requirements of subsection (2). Therefore, even though under Section 18, subsection (5) has been introduced w.e.f. 13.07.2006, the issue of refund was always subject to the provisions of Section 28(3), considering that Sections 18(2)(a) applies to final assessment. We may only note that the order of this Court dated 30.10.1991 in the matter of restitution would be subject to the provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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