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TMI Blog2004 (3) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the ullage reports. In other words, it cannot be said that the ullage report is the only basis for assessing the bulk liquid cargo discharged directly into the tank lorries. It is true that the quantity determined on the basis of ullage report may not be totally accurate. However, if there is no other established method available then the recourse to ullage report will have to be taken. Wherever, it is possible to ascertain the quantity actually delivered, then such method can be adopted for the purpose of assessment. Therefore, the Customs authorities are not justified in issuing public notice/circular directing the assessing authority to adopt the ullage report for assessing the bulk liquid cargo discharged directly into tank lorries. Thus, we hold that the public notices and the circular dated 27-12-2002 have to be read to the effect that wherever it is possible to determine the quantity actually delivered from the vessel into the tank lorry, then such method is to be adopted for the purpose of assessment of customs duty of bulk liquid cargo and it is not proper to direct the assessing authorities to assess only on the basis of ullage report. If there is any other rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners were about to file the bills of entry in respect of the bulk liquid cargo imported by them from Indonesia/Malaysia, the petitioners were informed that in view of the Public Notice No. 49, dated 30th March, 1992 issued by the Collector of Customs, Mumbai, the customs duty will not be levied on the basis of the B.P.T. Weigh-bridge report but on the basis of the quantity determined as per the ullage survey report at the port of discharge i.e. at Bombay. On a representation made by the petitioners, the Assistant Collector of Customs by his letter dated 19-8-1992 informed the petitioners that their request for actual weighment cannot be acceded to in view of the Public Notice No. 49, dated 30th March, 1992. This petition was filed by the petitioners challenging the above public notice dated 30th March, 1992 and the intimation dated 30th March, 1992. During the pendency of the petition, another public notice dated 17th September, 1997 has been issued by the Commissioner of Customs (Imports), Mumbai and subsequently, a Circular Bearing No. 96/02, dated 27th December, 2002 has been issued by the Central Board of Excise Customs (C.B.E.C.), New Delhi to the same effect. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2002 has been issued by misreading the orders of the CEGAT. In the case of Commissioner of Customs, Mumbai v. Hindustan Petroleum Corpn. Ltd. reported in 2000 (121) E.L.T. 109 (T), CEGAT noted that ullage report is made in the absence of any precise measurements. The Tribunal in that case, referring to several decisions of the Apex Court held that the taxable event in the case of bulk liquid cargo would commence from the date on which the ship crosses the customs barrier and will continue till the cargo is pumped into the shore tanks and the Bills of Entry for home consumption is filed. It was held that in cases where the cargo is discharged from the ship through the pipeline, the quantity determined in the shore tank through dipmeasurement should be the basis for assessment of customs duty. Similar view was taken by the CEGAT in the case of National Organic Chemicals Industries Ltd. v. Commissioner of Customs (Appeal No. C/820/98-Bom., dated 18-5-1999) 2000 (126) E.L.T. 1072 (T). Civil Appeal filed by the Commissioner of Customs against the decision of the Tribunal in the case NOCIL (supra) was dismissed by the Apex Court on 20th February, 2002 - 2002 (142) E.L.T. A280 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vey report is taken to ascertain the oil actually discharged into the tanker lorries. These tanker lorries are taken to B.P.T. Weigh-bridge after obtaining out of charge from the proper officer. Since there is no time gap left between the pre-discharge ullage survey and after discharge ullage survey, if any loss in the quantity occurs during physical weighment of lorries, it is due to adhesive properties of fatty oil, pilferage of the oil from the pipes during discharge, leakage from the tank lorries, mechanical error in the Weigh-bridge, error in reading the weight, etc. Accordingly, it was submitted that where there is no facility for discharge of cargo through regular pipeline, quantity as per the ullage survey report has to be the basis for the purpose of assessing the discharged cargo. 11.Mr. Jetley further submitted that the cargo discharged through the regular pipeline e.g. petroleum products are volatile in nature; whereas cargo such as palm acid oil are not volatile. In view of the volatile nature of the cargo and there being no chance of diverting the goods transported through the pipeline, the Tribunal held that in the case of cargo discharged through regular pipeline in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the cargo on board the vessel brought for unloading at the Port of Bombay. (2) In case, the person-in-charge of the ship or his Agent produces the ullage survey report prepared at the Port of loading and certified by an independent Surveyor, then the quantity mentioned in the ullage survey report should be accepted as the correct quantity brought by the vessel for unloading. (3) The vessel should be permitted to discharge liquid cargo after a ullage survey is carried out under the supervision of the Customs Officer and such survey report is signed by the Customs Officer, by the ship owner and the consignee. (4) After the discharge of the liquid cargo from the vessel a fresh survey should be carried out in the presence of the Customs Officer and this discharge completion survey report should be signed by the Customs Officer, the Ship-owner, and the consignee. (5) In case of any difference between the Bill of Lading, quantity or the ullage survey report of the Port of loading quantity and the discharge port ullage survey report quantity, then such difference shall be considered as short landed quantity and for which the ship owner should be held responsible." It is pertinent to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try, i.e. without the cargo being warehoused in a shore tank, assessment may continue to be done as per ship's ullage survey report. In the light of above, I am directed to7. convey that in case of all bulk liquid cargo imports, whether for home consumption or for warehousing, the shore tank receipt quantity should be taken as the basis for levy of customs duty. Pending provisional assessments may be finalized accordingly. In the case of bulk liquid cargo imports which are not discharged through regular pipelines and cleared directly on payment of duty under a while Bill of Entry i.e., without the cargo being warehoused in a shore tank, assessment may continue to be done as per ship's ullage survey report. As for liability of the Master/Agent for penal action for shortages u/s. 116 of the Customs Act, 1962, the same may continue to be fixed in terms of the guidelines laid down by the Bombay High Court in the case of M/s. Shaw Wallace. The liability should be evaluated by comparing ship's ullage quantity at the port of discharge with the ship's load port ullage quantity or Bill of Lading quantity if the former is not made available by the Master/Agent." 16.In our opinion, the infere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hod which gives more accurate results, the quantity determined as per the ullage can be taken into account for the purpose of assessment. 19.In these circumstances, we hold that the public notices and the circular dated 27-12-2002 have to be read to the effect that wherever it is possible to determine the quantity actually delivered from the vessel into the tank lorry, then such method is to be adopted for the purpose of assessment of customs duty of bulk liquid cargo and it is not proper to direct the assessing authorities to assess only on the basis of ullage report. If there is any other recognised method that gives more accurate results, such method may be taken into account for the purpose of assessment. In the absence of any such method, the quantity determined as per the ullage can be taken into account for the purpose of assessment by ensuring that such ullage survey prior to discharge of liquid cargo is carried out under the supervision of the customs officer and signed by the consignee and the customs officer and after discharge of liquid cargo also survey is carried out in the presence of customs officer and the consignee and report is signed by both of them. The petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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