Liquid cargo assessment turns on shore tank receipt; transit and storage loss cannot be treated as dutiable quantity.

Customs duty was considered unsustainable where imported phosphoric acid, exempt for use in fertilizer manufacture, was short-received in the shore tank and the assessee produced evidence of that short receipt. The Tribunal accepted that, for liquid cargo, the quantity actually received in the shore tank is the relevant assessable quantity, and transit or storage loss cannot be treated as dutiable receipt. It also followed the Board circular and the settled view applied in an earlier identical period involving the same assessee, finding no basis to depart from that approach. On that reasoning, the Revenue's appeal was rejected.

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Issues: Whether customs duty could be demanded by denying exemption benefit on alleged short receipt of imported phosphoric acid intended for manufacture of fertilizers.

Analysis: The imported phosphoric acid was undisputedly meant for manufacture of fertilizers and was covered by the relevant exemption notification. The records showed short receipt in the shore tank, and the Tribunal accepted the lower authority's finding that the respondent had produced evidence regarding such short receipt. The Tribunal also relied on the Board circular and the settled view that, in the case of liquid cargo, the quantity actually received in the shore tank is the relevant quantity for assessment, and transit or storage loss cannot be treated as dutiable receipt. As the same respondent had already obtained a favourable decision on the identical issue for an earlier period, no reason was found to depart from that view.

Conclusion: The demand was not sustainable and the Revenue's appeals were rejected.

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