Bulk liquid cargo assessment follows shore-tank receipt, so transfer shortage does not defeat exemption for covered imports.

In bulk liquid cargo imports, customs assessment is to be based on the quantity actually received in the shore tank, and a shortfall arising during transfer does not by itself justify denial of exemption. Imported phosphoric acid used in fertilizer manufacture was covered by the relevant exemption notifications, and the Board circular on assessment of bulk liquid cargo supported this approach. The short-received quantity was therefore not liable to customs duty, the exemption benefit was correctly applied, and the Revenue's challenge failed with the demand set aside.

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Issues: Whether the short receipt of imported Phosphoric Acid in the shore tank was liable to customs duty by denying the benefit of the exemption notifications.

Analysis: The imported Phosphoric Acid was used for manufacture of fertilizers and was covered by the exemption notifications relied upon. The quantity discrepancy arose in the course of transfer of bulk liquid cargo and the relevant assessable quantity was the quantity received in the shore tank. The Board circular on assessment of bulk liquid cargo supported this approach, which was consistent with the settled view accepted in earlier decisions.

Conclusion: The short-received quantity was not liable to customs duty, and the benefit of exemption was correctly allowed.

Final Conclusion: The Revenue's challenge failed and the order dropping the demand was upheld.

Ratio Decidendi: In cases of bulk liquid cargo, customs assessment must be based on the quantity actually received in the shore tank, and a shortage arising from transfer or transit conditions does not justify denial of exemption when the goods are otherwise covered by the notification.

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