Customs duty on bulk imports applies only to goods actually received; lost cargo before clearance is not dutiable.

Customs duty on bulk liquid cargo is chargeable only on the quantity that has actually completed importation and been received in the shore tank for clearance or warehousing. Where a shortfall occurs because goods are lost, destroyed, or pilfered before home consumption or warehousing, duty is not payable on that lost quantity. The assessment basis for bulk imports is the quantity actually received, not the invoiced quantity, and the cited circular is consistent with that approach. The demand on the short quantity was therefore unsustainable, and the duty liability was confined to the quantity actually imported and received, with consequential relief granted.

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Issues: Whether customs duty could be demanded on the difference between the invoiced quantity of bulk liquid cargo and the quantity actually cleared from the shore tank, when the shortfall was claimed to have been lost before clearance for home consumption or warehousing.

Analysis: The levy of customs duty arises only on goods imported into India, and importation is complete only when the goods have been cleared for home consumption or permitted to be deposited in a warehouse. Where imported goods are lost, destroyed, or pilfered before such clearance, duty is not payable on the lost quantity. In the case of bulk liquid cargo, the governing basis for assessment is the quantity actually received in the shore tank, not the invoiced quantity, and the subsequent administrative circular also recognises this principle.

Conclusion: The demand on the short quantity could not be sustained, and the duty liability had to be confined to the quantity actually imported and received.

Final Conclusion: The assessee succeeded, and the duty demand and consequential confirmation were set aside with consequential relief as permitted by law.

Ratio Decidendi: Customs duty on bulk imports is chargeable only on the quantity that has completed importation and is actually received for clearance or warehousing, and not on goods lost before such stage.

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