Customs valuation of liquid cargo: duty applies only to quantity actually received, and demurrage stays outside assessable value.

Customs duty on imported liquid bulk cargo is leviable only on the quantity actually received in India at the time and place of importation, not on invoice quantity where ocean loss occurs or goods are not landed in shore tanks. Post-importation demurrage charges incurred after arrival at the Indian port do not form part of the transaction value and are not includable in customs assessable value. The article states that assessment must reflect the quantity actually imported and exclude demurrage from valuation.

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Issues: (i) Whether customs duty on liquid bulk cargo was to be levied on the quantity actually received in the shore tanks or on the invoice quantity; (ii) whether demurrage charges were includable in the assessable value for customs valuation.

Issue (i): Whether customs duty on liquid bulk cargo was to be levied on the quantity actually received in the shore tanks or on the invoice quantity.

Analysis: The levy of import duty is on imported goods at the time and place of importation. Where liquid cargo suffers ocean loss or is not received in the shore tanks, the quantity actually received in India is the relevant basis for assessment. The statutory scheme under the Customs Act, 1962 and the valuation rules does not permit duty to be charged on goods not actually imported into the customs area.

Conclusion: The assessment had to be made on the basis of the quantity of crude oil actually received in the shore tanks at the port of arrival in India, in favour of the assessee.

Issue (ii): Whether demurrage charges were includable in the assessable value for customs valuation.

Analysis: Demurrage charges are incurred after the goods reach the Indian port and are therefore post-importation in nature. Such charges do not form part of the transaction value for customs valuation and cannot be added to the assessable value.

Conclusion: Demurrage charges were not includable in the transaction value for assessment, in favour of the assessee.

Final Conclusion: The orders of the Commissioner (Appeals) were set aside and the connected appeals were allowed, as both issues were answered in favour of the assessee.

Ratio Decidendi: Customs duty on imported liquid cargo is leviable only on the quantity actually received in India at the time and place of importation, and post-importation charges such as demurrage do not form part of the customs assessable value.

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