Tribunal Orders Reassessment with Shore Tank Quantities, Canalization Charges, and Notional Landing Charges in Three Months.

The Tribunal remanded the appeals to the original adjudicating authority, directing that assessments be finalized using shore tank quantities and including canalization charges in the assessable value. Actual landing charges should be determined based on provided data or a 1% notional value if unavailable. The provisional assessment must be finalized within three months. Appeals were disposed of accordingly.

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Issues Involved:
1. Computation of landing charges.
2. Inclusion of canalization charges in the assessable value.
3. Basis for valuation and computation of import duties (shore tank quantity vs. invoice quantity).
4. Grant of suo motu refund on finalization of assessment.
5. Applicability of interest on duty payable on finalization of assessment.

Detailed Analysis:

1. Computation of Landing Charges:
The main issue was whether landing charges should be computed at actual costs or at 1% of the CIF value as prescribed under Rule 9(2)(b) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The Tribunal examined the agreement between BPCL and Finolex Industries Ltd. and found that only pre-importation charges such as handling fees, berthing fees, and tug attendance fees should be included in the assessable value. Post-importation expenses, such as storage and transportation costs, should not be included. The Tribunal remanded the matter to the original adjudicating authority to segregate these charges and include only the pre-importation charges in the assessable value. If actual landing charges are not available, a notional 1% of CIF value can be used as per the Supreme Court's ruling in Wipro Ltd vs. Assistant Collector of Customs (2015).

2. Inclusion of Canalization Charges:
The Tribunal held that canalization charges paid to IOCL are includable in the assessable value, as settled by the Supreme Court in Hyderabad Industries Ltd. vs. Union of India (2000).

3. Basis for Valuation and Computation of Import Duties:
The Tribunal decided that the shore tank quantity should be used for the assessment of petroleum products, based on the Supreme Court's judgment in Mangalore Refinery & Petroleum (2015). This issue was no longer res integra and was settled in favor of the appellants.

4. Grant of Suo Motu Refund on Finalization of Assessment:
The Tribunal acknowledged that the issue of automatic refund on finalization of assessments and the non-applicability of unjust enrichment was a question of law that could be raised at this level. The matter was remanded to the original authority for proper appreciation of facts and computation of the refund due to the appellants.

5. Applicability of Interest on Duty Payable on Finalization of Assessment:
The Tribunal noted that the issue of interest on duty payable before the finalization of assessment was not taken up by the appellant before the original or appellate authority. However, it allowed the appellants to raise this issue at this level and remanded it to the original authority for consideration.

Conclusion:
The appeals were allowed by way of remand to the original adjudicating authority. The Tribunal directed that assessments be finalized based on shore tank quantities and that canalization charges be included in the assessable value. The original authority was instructed to determine actual landing charges based on data provided by the appellants or use a 1% notional value if actual charges were not available. The provisional assessment was to be finalized within three months of the receipt of the order. The appeals were disposed of accordingly.

(Order pronounced in the court on 26/4/19)

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