Customs valuation of liquid cargo must follow actual receipt at port, with post-importation demurrage excluded from assessable value.

Customs duty on liquid bulk cargo is chargeable on the quantity actually received in the shore tanks at the Indian port, not on the bill of lading quantity, because valuation must reflect goods actually imported. Demurrage incurred after arrival at the port is a post-importation charge and does not enter the transaction value for customs assessment. The impugned order was set aside and the assessment was required to be redetermined on the basis of the quantity actually received, without adding post-importation demurrage.

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Issues: (i) Whether customs duty on imported liquid cargo was to be assessed on the quantity actually received in the shore tanks or on the bill of lading quantity; (ii) whether demurrage charges incurred after the goods reached the Indian port were includable in the value for customs assessment.

Issue (i): Whether customs duty on imported liquid cargo was to be assessed on the quantity actually received in the shore tanks or on the bill of lading quantity.

Analysis: The applicable legal position is that customs duty is leviable on imported goods as received in India at the time and place of importation. Where part of the cargo is not actually received in the shore tanks, the measure of duty cannot be based on a notional quantity reflected in the bill of lading. The relevant valuation scheme under the Customs Act, 1962 and the Customs Valuation Rules proceeds on the basis of the imported goods actually received.

Conclusion: The assessment had to be made on the quantity of crude oil or liquid cargo actually received in the shore tanks in India, and not on the bill of lading quantity.

Issue (ii): Whether demurrage charges incurred after the goods reached the Indian port were includable in the value for customs assessment.

Analysis: Demurrage incurred after arrival at the Indian port is a post-importation event. Such expenditure does not form part of the transaction value for customs purposes, because valuation is confined to the imported goods at the point of importation and cannot be enlarged by charges arising after arrival.

Conclusion: Demurrage charges were not includable in the transaction value for assessment under the Customs Act, 1962.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the customs assessment was required to be redetermined on the basis of the quantity actually received in the shore tanks without adding post-importation demurrage.

Ratio Decidendi: For customs valuation of liquid bulk cargo, duty is chargeable only on the quantity actually imported and received at the port, and post-importation charges such as demurrage do not form part of the assessable value.

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