2023 (11) TMI 70 - AT - Customs

CESTAT upholds refund of excess customs duty paid during provisional assessment based on actual quantity received principle

CESTAT Ahmedabad dismissed the appeal regarding customs duty refund on provisional clearance. The appellant had paid excess customs duty during ... Quantity actually received in India as the basis for levy of customs duty - Ship's Ullage Survey / shore tank quantity for assessment of bulk liquid imports - invalidity of relying on Bill of Lading quantity where import is not complete - application of the Hon'ble Supreme Court decision in Mangalore Refinery and Petrochemicals Limited - consequential effect of Board circulars clarifying assessment protocol for bulk liquid cargoQuantity actually received in India as the basis for levy of customs duty - Ship's Ullage Survey / shore tank quantity for assessment of bulk liquid imports - application of the Hon'ble Supreme Court decision in Mangalore Refinery and Petrochemicals Limited - Whether customs duty for imported crude petroleum oil must be assessed on the quantity actually received in India (shore tank/Ship's Ullage Survey) rather than on the Bill of Lading quantity, and whether the adjudicating and appellate orders conform to the law laid down by the Hon'ble Supreme Court and Board circulars. - HELD THAT: - The Tribunal held that the question is no longer res integra in view of the Hon'ble Supreme Court's ruling in Mangalore Refinery and Petrochemicals Limited, which declared that the quantity of crude oil actually received into a shore tank in India is the proper basis for levy of customs duty and that reliance on Bill of Lading quantities (or a contrary circular) is contrary to the statutory scheme. The appellate authority had applied the MRPL ratio and subsequent Board clarification directing that shore tank quantities (or, where goods are directly cleared without shore tanking, the Ship's Ullage Survey at discharge port) govern assessment of bulk liquid cargo. The Tribunal found that the adjudicating authority and Commissioner (Appeals) correctly applied MRPL and the Board's circulars in finalizing the refunds and adjustments, including recognition that certain short payment and erroneous refund aspects were being pursued separately by issue of an SCN. Having applied the Supreme Court principle and the Board guidance, the impugned appellate order was held to be legally tenable. [Paras 6, 7]The Tribunal upholds the view that assessment must be based on quantity received in India (shore tank/Ship's Ullage Survey) in line with MRPL and Board circulars, and finds the impugned order-in-appeal correct.Final Conclusion: The appeal is dismissed; the impugned order-in-appeal upholding assessment and refund adjustments in conformity with the Hon'ble Supreme Court's decision and Board circulars is affirmed. Issues involved:The issues involved in the judgment include provisional assessment of customs duty on imported crude petroleum oil, eligibility for refund of customs duty, proper assessment based on quantities received at the discharge port, reliance on Supreme Court judgments and circulars for assessment of customs duty.Provisional Assessment of Customs Duty:The appellant imported consignment of crude petroleum oil and filed 12 bills of entry for clearance, which were provisionally assessed. The final assessment by the proper officer revealed a discrepancy in the customs duty paid provisionally and the actual duty payable, leading to the appellant's eligibility for a refund of the excess duty paid.Appeal Against Refund Order:The department appealed against the refund sanctioned to the appellant, leading to denovo proceedings. The Deputy Commissioner of Customs, after detailed examination, sanctioned a refund claim to the appellant under the Customs Act, 1962. However, a differential amount and short payment of duty were also identified, leading to a separate order issued against the claimant.Commissioner (Appeals) Decision:The Commissioner (Appeals) upheld the order-in-original, stating that the final assessment of bills of entry was erroneous as it did not consider the quantities received at the discharge port for calculating customs duty. The Commissioner relied on Supreme Court judgments and circulars to determine the correct assessment method based on the quantities of imported goods actually received in India.Appellate Tribunal Decision:The Appellate Tribunal considered the Supreme Court decision in the case of M/s. Mangalore Refinery and Petrochemicals Limited, which clarified that the quantity of goods received at the discharge port should be the basis for customs duty payment. In line with this precedent, the Tribunal found the impugned order-in-appeal legally tenable and dismissed the appellant's appeal.Conclusion:The Appellate Tribunal, citing the Supreme Court precedent, upheld the correct assessment method based on quantities received at the discharge port for payment of customs duty on imported crude petroleum oil. The appeal was deemed without merit and dismissed accordingly.