Ad valorem customs valuation of crude oil follows transaction value on Bill of Lading quantity, not shore-tank receipt.

For ad valorem customs duty on imported crude oil, assessable value is determined by the transaction value actually paid or payable for the Bill of Lading quantity, not by a proportionate reduction for lesser shore-tank receipt. The Tribunal distinguished earlier shore-tank quantity reasoning as relevant to specific-rate duty, while holding that Section 14 of the Customs Act, 1962 and the Customs Valuation Rules govern ad valorem valuation. Because the importer had to pay on the Bill of Lading quantity and no price reduction applied for transit loss, the full invoice-based amount remained the assessable value. Remission provisions under Sections 13 and 23 were inapplicable.

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Issues: Whether, in the case of ad valorem customs duty on imported crude oil, the assessable value is to be determined on the basis of the full amount paid or payable on the Bill of Lading quantity, or on a proportionate basis with reference to the lesser quantity actually received in the shore tanks.

Analysis: The dispute was confined to customs valuation and not to the factual question of the quantity received in the shore tanks. The earlier Tribunal view on shore-tank quantity was held to be relevant to specific-rate duty and not to ad valorem assessment. Once the levy is ad valorem, Section 14 of the Customs Act, 1962 and the Customs Valuation Rules apply, and the transaction value is the price actually paid or payable for the imported goods. Since the appellants were required to pay IOC on the basis of the Bill of Lading quantity and no reduction in price was provided for the transit loss, the full payment remained the transaction value. The Board's circular also supported invoice-price based assessment in ad valorem bulk liquid cargo cases, while remission provisions under Section 13 and Section 23 of the Customs Act, 1962 were held inapplicable because the demand was not for goods not received but for the value actually paid for the imported consignment.

Conclusion: The assessable value for ad valorem duty was correctly taken as the full amount payable on the Bill of Lading quantity, not a reduced value based on shore-tank receipt, and the assessee's challenge failed.

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