TaxTMI 
TaxTMI 
2011 (6) TMI 518
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.... 258,07,87,156/- was sought to be recovered on the goods covered by 164 Bills of Entry. Proposal to include barging charges and demurrage charges in the assessable value of the goods was made under Rule 9(2) of the Customs Valuation Rules, 1988. The proposals in the show-cause notice were contested by HPCL in a detailed reply, wherein it was mainly contended that the assessment required to be finalized on the basis of the quantity ascertained by shore tank measurement and not on the quantity reflected on the ullage survey report. They submitted that they were paying duty in the past on the quantity received in their storage tank (shore tank) and that the assessment should be finalized on the same basis as per Circular No. 96/2002-Cus dated 27.12.2002. They submitted that the proposal in the show-cause notice was not supported by CBEC Circulars or judicial decisions. With regard to inclusion of demurrage charges in the assessable value of the goods, they challenged the correctness of the quantification thereof proposed in the show-cause notice. It was further submitted that some of the imports had been made under advance licences and, therefore, the goods covered u....
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....ess of the duty payable on the redetermined assessable value. The Ld. Counsel submits that these excess payments of duty totalling to Rs. 9.85 crores were not adjusted against the demand of duty worked out on the aforesaid 42 Bills of Entry. In this connection, ld. counsel has relied on the Tribunal's decision in the case of M/s. Apar Industries Ltd. vs Commissioner of Customs (Import), Mumbai, wherein this Bench held that, where all the Bills of Entry has been finalized by a common order, refunds due to the assessee should have been adjusted against the demand of duty. It is, contextually, pointed out that this decision of the Tribunal has been followed by the Commissioner (Appeals) in HPCL's own case and the benefit of adjustment of short- payment of duty against excess payment of duty was allowed in respect of a large number of Bills of Entry covering imports of crude oil for a subsequent period. A copy of Order-in-Appeal No.199 &200/2009/MCH/AC/Oil Unit/09-10 dated 29.07.2009 passed by the Commissioner of Customs (Appeals), Mumbai-I has also been produced by the counsel. The ld. counsel submits that, to the best of his knowledge, no appeal was filed by t....
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....y with in a case where excess payment of duty has been found on finalization of provisional assessment of a Bill of Entry and short- payment of duty found on finalization of provisional assessment of another Bill of Entry. It is pointed out that, in the present case, HPCL did not file any refund claim, and therefore, the question of adjustment between short- payment of duty on one set of Bills of Entry and excess payment of duty on another set of Bills of Entry does not arise. 6. In the above context, the ld.JCDR has referred to the provisions of Sec.27 of the Customs Act. He has particularly referred to Explanation II which deals with the period of limitation for a claim for refund of duty arising out of finalization of provisional assessment. According to ld.JCDR, this provision would also indicate that any claim for refund of duty arising out of finalization of provisional assessment of a Bill of Entry should be duly claimed under Sec.27 of the Act. In this connection, he has also relied on the Hon'ble High Court's judgment in United Spirits Ltd vs Commissioner of Customs (Import), Mumbai [ 2009(240)E.L.T. 513 (Bom)] wherein it was h....
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....s of Rule 7(4) of the Central Excise Rules, 2002. The Larger Bench found that, if such adjustment was allowed, it would result in unjust enrichment to the assessee in regard to interest on duty. The Larger Bench further held that, where excess payment of duty paid by the assessee was found upon finalization of provisional assessment under Rule 7(3), the assessee had no option but to apply to the excise officer for refund of such duty in accordance with the relevant provisions of law and within the time prescribed. Once such claim was made, the principle of unjust enrichment would get attracted. This decision of the Larger Bench is equally applicable to a case where, upon finalization of provisional assessment, excess payment of duty by the assessee is found in respect of one set of Bills of Entry and short- payment of duty found in respect of another set. On the reasoning adopted by the Larger Bench, any adjustment between the excess payment of duty and the short-payment of duty is not permissible and, on the other hand, what is required to be done by the assessee is to pay the duty short- paid and separately claim refund of the duty paid in excess. Needless to say that....
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....n relation to the first set of 42 Bills of Entry and the excess amount of duty relating to the second set of 43 Bills of Entry is not tenable and the same is rejected. 12. Another issue raised by the ld. counsel is whether the assessment should be based on invoice value or on 'shore tank quantity'. In this connection, the ld.counsel has relied on certain Circulars issued by the CBEC. He has also relied on case law. Ld.JCDR points out that the issue does not arise from the Memo of Appeal. We have perused the grounds of this appeal and have not found any grievance having been raised regarding the basis of assessment. Therefore, the plea made by the ld.counsel at the bar cannot be accepted. 13. A few minor grievances of the appellant are found in grounds 2, 3 & 4 of this appeal, which are reproduced below:- "2. Bill of Entry No.661291 dated 24.3.2006 amounting to Rs. 11.30 Crores does not pertain to the appellant though it has been included in the calculation of duty demand of Rs. 43.27 Crores. 3. The respondent, in his order, considered the entire quantity of crude though part of the crude was sent to other ports for which no duty is pay....
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.... Valuation Rules did not contemplate inclusion of extraordinary expenses like demurrage in the assessable value of the goods. The above decision of the Tribunal's Larger Bench was affirmed by the Supreme Court in Commissioner of Customs, Calcutta vs. Indian Oil Corporation Ltd. [ 2004 (165) E.L.T.257 (S.C.)]. According to the ld.counsel the ratio decidendi of the Larger Bench decision in the case of Indian Oil Corporation Ltd. is also supported by the Hon'ble Supreme Court's judgment in the case of Ispat Industries Ltd. vs Commissioner of Customs, Mumbai [ 2006(202) E.L.T. 561 (S.C.)] wherein barging charges were considered to be extraordinary expenses and hence not includible in the assessable value of the imported goods. 16. Jt.CDR referred to certain decisions of the Tribunal to the effect that demurrage charges could be included in the assessable value of the imported goods, like Tata Power Co.Ltd. vs. Commissioner of Customs, Mangalore [ 2009(240) E.L.T. 742 (Tri-Bang.) He has also claimed support from the Board's Circular No. 26/2006-Cus.dated 26.9.2006 wherein it was instructed that all pending provisional assessments in respect of imp....