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Customs duty based on received goods, not bill of lading quantity. Demurrage charges post-importation. The Supreme Court clarified that customs duty is levied on imported goods upon entering customs barriers, not based on the bill of lading quantity. Duty ...
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Customs duty based on received goods, not bill of lading quantity. Demurrage charges post-importation.
The Supreme Court clarified that customs duty is levied on imported goods upon entering customs barriers, not based on the bill of lading quantity. Duty is determined by the quantity of crude oil received in shore tanks. Demurrage charges were deemed post-importation events and not included in the valuation for customs assessment. Rulings in favor of the appellant were based on settled cases and Supreme Court precedents. Consequently, the Commissioner's orders were set aside, and the appeals were allowed on 20/04/2018.
Issues: Levy of duty of customs on liquid cargo not received in shore tanks; inclusion of demurrage charges for valuation under Customs Act, 1962.
Analysis: The Revenue filed applications for bunching of appeals due to identical issues. With consent, the issue was decided on merits. Appellant challenged Orders-in-Appeal related to duty on crude oil and demurrage charges. Appellant cited settled cases favoring them. The Hon'ble Supreme Court rulings in Mangalore Refinery & Petrochemicals Ltd. and CCE, Mangalore cases were crucial.
On the duty levy issue, the Supreme Court clarified that duty is on imported goods, not quantity. The taxable event is "import," completed upon goods entering customs barriers. The bill of lading quantity does not reflect the imported quantity. The Tribunal's reasoning on customs duty basis was unsustainable. The judgment declared that duty is based on crude oil quantity received in shore tanks.
Regarding demurrage charges, the Supreme Court held that they are post-importation events and should not be part of the transaction value. This decision was reinforced by the Essar Steel Ltd. case. Consequently, demurrage charges are not included in crude oil valuation for assessment purposes.
As per the Supreme Court judgments, the Commissioner's orders were set aside as unsustainable. Therefore, the appeals were allowed, and the judgments were pronounced on 20/04/2018.
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