Customs duty on imported crude oil must follow shore tank receipt quantity, not bill of lading quantity, with demurrage excluded.

For imported liquid cargo, customs duty is chargeable on the quantity actually received in the shore tanks at the place of importation, not on the bill of lading quantity where it does not reflect receipt into India. The valuation must follow the statutory transaction value at the time and place of importation, and demurrage charges were not includible in assessable value for the period in question. The method used to compute shore tank receipt could not displace the governing rule on dutiable quantity, so the revenue's enhanced assessment was unsustainable.

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Issues: Whether customs duty on imported crude oil was to be assessed on the quantity shown in the bill of lading or on the quantity actually received in the shore tanks; and whether demurrage charges and the method adopted for shore tank quantity could be included or applied so as to enhance the assessable value.

Analysis: The dispute concerned finalisation of provisional assessments under the Customs Act, 1962 for imported crude oil. The relevant valuation scheme required assessment on the transaction value at the time and place of importation. For liquid cargo, the quantity actually received into the shore tank was the material quantity for levy, and the bill of lading quantity could not be used where it did not reflect the goods at the time of importation. The Court also followed the settled position that demurrage charges were not includible in the assessable value for the period in question, and that the method of computing shore tank receipt quantity could not override the principle that duty attaches only to goods brought into India.

Conclusion: Duty was required to be assessed on the quantity actually received in the shore tanks, not on the bill of lading quantity, and the challenged valuation method and enhancement were unsustainable. The additions made by the revenue could not be sustained.

Final Conclusion: The appeals succeeded and the impugned orders were set aside, with the valuation and duty demand determined in favour of the importer.

Ratio Decidendi: For imported liquid cargo, customs duty is chargeable on the quantity actually received at the place of importation and not on the bill of lading quantity, and valuation must conform to the statutory measure of duty at the time and place of importation.

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