Customs duty on imported crude oil: ullage survey versus shore-tank dip quantity for assessment; shore-tank quantity upheld, appeal dismissed

The dominant issue was the correct quantity for customs assessment of imported crude petroleum oil-ullage survey quantity on the vessel or dip-measured quantity pumped into shore tanks. Applying SC law on "import" under the Customs Act, the Tribunal held that import is not completed on entry into territorial waters; the taxable event is reached at the customs barrier when the bill of entry for home consumption is filed, rejecting the Department's theory as contrary to SC precedent. It further held that a Commissioner's public notice purportedly based on a consent HC order had no binding force, and that a contrary Tribunal view lacked precedential value as it relied on overruled authority and stood referred. Consequently, duty was correctly demanded on shore-tank quantity and the appeal was dismissed.

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Issues Involved: Determination of quantity of liquid cargo for duty assessment based on ullage survey vs. dip measurement in shore tanks.

Summary:
1. The appeal considered the correct method for determining the quantity of liquid cargo, specifically crude petroleum oil, imported in a tanker for duty assessment. The dispute arose when the quantity declared by the importer differed from the quantity determined by an ullage survey. The importer argued for dip measurement in shore tanks as a more accurate method, which was accepted by the Commissioner (Appeals) but challenged by the department.

2. The Commissioner supported dip measurement over ullage survey, citing precedents and emphasizing the importance of precise measurement for duty assessment. The department contended that the quantity determined by the ullage survey upon importation is the quantity liable to duty, as per the Customs Act and relevant guidelines.

3. Referring to Supreme Court judgments, it was established that the taxable event for duty assessment occurs when goods cross the customs barrier, in this case, when the oil is pumped into shore tanks. This criterion determines the quantity of goods subject to duty.

4. The department's grounds of appeal regarding the definition of "import" and reliance on Public Notice No. 49/92 were refuted. The Public Notice was found not to be binding for duty assessment and lacked clarity in its provisions, leading to contradictions in determining the quantity for assessment.

5. The Tribunal upheld the Commissioner's decision that duty should be demanded based on the quantity of oil pumped into shore tanks, dismissing the department's appeal. The order emphasized the importance of accurate measurement methods for duty assessment.

Decision: The appeal is dismissed, affirming that the quantity of liquid cargo pumped into shore tanks is the appropriate basis for duty assessment, as determined by dip measurement.

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