Shore tank receipt quantity governs customs duty on bulk liquid imports; ullage-based demand was unsustainable.

For bulk liquid cargo imports, customs duty is to be levied on the shore tank receipt quantity, as clarified by the applicable CBEC circular, rather than on the ullage report. Where the demand was founded only on an alleged shortage between the imported quantity and the quantity received in the shore tank, that basis could not be sustained. The record showed no dispute about assessment of the goods themselves, and the contrary precedent relied on by the department was held inapplicable. The duty demand based on the ullage report was therefore not sustainable, and the relief granted to the assessee was upheld.

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Issues: Whether, for bulk liquid cargo imports, customs duty was to be levied on the basis of the ullage report or on the shore tank receipt quantity, and whether the demand raised on account of alleged shortage in transit was sustainable.

Analysis: The applicable CBEC circular clarified that in the case of bulk liquid cargo imports, whether for home consumption or warehousing, the shore tank receipt quantity is to be taken as the basis for levy of customs duty. The record also showed no dispute regarding assessment of the goods as such, and the demand was founded on the shortage between imported quantity and quantity received. In these circumstances, the basis adopted by the adjudicating authority could not be sustained, and the reliance placed on the contrary precedent was held inapplicable.

Conclusion: The duty demand based on the ullage report was not sustainable, and the order setting aside the demand was upheld in favour of the assessee.

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