TaxTMI 
TaxTMI 
Assessment of bulk liquid cargo – ship ullage survey report Vs shore tank receipt – Supreme Court’s order dated 20.2.2002 in Civil Appeal No.6764/1999 in the case of Commissioner of Customs (Import), Mumbai Vs M/s. National Organic Chemical Industries Ltd.(NOCIL)
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Customs (Import), Mumbai Vs M/s. National Organic Chemical Industries Ltd.(NOCIL). I am directed to invite your attention to the above mentioned subject. Attention is also invited to Board’s Circular No.46 dated 17.5.2000 directing the Custom Houses to finalise the provisional assessments relating to bulk liquid cargo imports on the basis of ullage survey reports. However, pursuant to the Supreme Court order dated 20.2.2002 referred to above, the matter has been re-examined by the Board. 2. To briefly recapitulate the facts, for quite some time now, a dispute has been going on between the oil companies and Customs reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of Commissioner of Customs, Mumbai Vs HPCL has held that bulk liquid cargo would be "considered to have crossed the Customs barrier only when they are pumped into the shore tanks. That being the taxable event, it is that quantity of goods, which are liable to duty". The Tribunal has thus held that the customs duty should be demanded on the quantity that is pumped into the shore tanks. 4. The CEGAT order dated 7.7.2000 in the case of HPCL has been followed subsequently by the Tribunal in other cases as well. In the case of Collector of Customs, Visakhapatnam Vs HPCL, the CEGAT in its order No.483/2000-C dated 15.9.2000 has ordered finalization of provisional assessments on the basis of ‘....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Writ Petition Nos.1236 of 1981 and 1354 of 1984 (Shaw Wallace & Co. Ltd. Vs Assistant Collector of Customs & Others) had laid down certain guidelines in July, 1986. As per these guidelines, the liability of the ship’s Master/Agent is to be determined by comparing the ship’s ullage quantity at the port of discharge with the ship’s load port ullage quantity or the Bill of Lading quantity if the former is not made available by the Master/Agent. As the order of the Bombay High Court is in the nature of a consent order, this has not been a subject matter of dispute insofar as the liability of the Master/Agent under section 116 of the Customs Act, 1962 is concerned. The Board is, therefore, of the view that the liability of the Master/Agent....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as per ship’s ullage survey report. 7. In the light of above, I am directed to convey that in case of all bulk liquid cargo imports, whether for home consumption or for warehousing, the shore tank receipt quantity should be taken as the basis for levy of customs duty. Pending provisional assessments may be finalised accordingly. In the case of bulk liquid cargo imports which are not discharged through regular pipelines and cleared directly on payment of duty under a white Bill of Entry, i.e., without the cargo being warehoused in a shore tank, assessment may continue to be done as per ship’s ullage survey report. As for liability of the Master/Agent for penal action for shortages u/s 1....