Customs valuation of imported crude oil uses shore tank quantity, while post-import demurrage stays excluded from value.

Customs valuation of imported crude oil is based on the quantity actually received in the shore tank at the Indian port, because the taxable event is import and the bill of lading quantity does not control customs assessment. Demurrage incurred after the goods reach Indian ports is a post-importation expense and is not includible in the transaction value for customs purposes. The ratio states that only the quantity actually imported is relevant for duty, and charges arising after importation do not form part of customs valuation.

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Issues: (i) Whether customs duty on imported crude oil was to be assessed on the bill of lading quantity or on the quantity actually received in the shore tank in India; (ii) Whether demurrage charges incurred after arrival of the goods at Indian ports were includible in the transaction value for customs assessment.

Issue (i): Whether customs duty on imported crude oil was to be assessed on the bill of lading quantity or on the quantity actually received in the shore tank in India.

Analysis: The relevant valuation under the Customs Act is tied to imported goods at the time and place of importation. The taxable event is import, and quantity shown in the bill of lading reflects the purchase transaction, not necessarily the quantity imported for customs purposes. The cited Supreme Court authority settled that the quantity actually received into the shore tank at the port in India is the proper basis for assessment of customs duty.

Conclusion: The issue is answered in favour of the assessee. Customs duty was required to be assessed on the quantity actually received in the shore tank.

Issue (ii): Whether demurrage charges incurred after arrival of the goods at Indian ports were includible in the transaction value for customs assessment.

Analysis: Demurrage arises after the goods have reached Indian ports and is therefore a post-importation expenditure. On the settled legal position, such expenditure does not form part of the transaction value for the purpose of customs valuation.

Conclusion: The issue is answered in favour of the assessee. Demurrage charges were not includible in the transaction value.

Final Conclusion: The common order of the lower authority was set aside and all the appeals were allowed with consequential relief.

Ratio Decidendi: For customs valuation, only the quantity actually imported and received at the port of importation is relevant, and charges incurred after importation do not enter the transaction value.

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