Invoice-based transaction value governs customs duty on bulk liquid imports, not departmental density measurements.

For ad valorem imports of bulk liquid cargo, customs duty is assessed on the invoice-based transaction value where that is the contractual price and no extra consideration is shown for alleged density-related variations. The contract made the surveyor's quantity determination final and binding, and did not permit additional recovery on the basis of departmental density testing or shore tank measurements. A CBEC circular also stated that assessment should follow the invoice price paid or payable, regardless of quantity ascertained by other methods. On those facts, duty had to be levied on the invoice value and the Revenue's challenge failed.

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Issues: Whether customs duty on imported furnace oil had to be assessed on the invoice based transaction value or could be enhanced on the basis of density variations and shore tank or other measurements.

Analysis: The duty had been discharged on the transaction value reflected in the invoices and there was no evidence that any additional price was paid for the alleged higher density. The contract made the surveyor's quantity determination final and binding, and did not provide for any extra recovery on the basis of departmental density testing. The CBEC circular stated that in cases of ad valorem duty on bulk liquid cargo, assessment should be based on the invoice price paid or payable, irrespective of quantity ascertained through shore tank measurement or any other manner. The earlier tribunal ruling on similar facts held that duty liability depends on invoice value at the time of importation, irrespective of shortage or variation in quantity.

Conclusion: The customs duty had to be assessed on the invoice based transaction value, and the Revenue's appeal was rejected.

Ratio Decidendi: For ad valorem imports of bulk liquid cargo, where the contractual price is the transaction value and no extra consideration is shown for alleged density-based quantity differences, customs duty must be assessed on the invoice price rather than on departmental measurement.

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