TaxTMI 
TaxTMI 
2019 (5) TMI 981
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....rging any canalization charges to the OMCs. However, w.e.f. 01.04.2002, IOCL had imported LPG on behalf of OMCs and had effected high-seas-sales to BPCL (Appellants). The Appellants had declared the Assessable Value in the Bills of Entry on the basis of FOB value & freight charges billed by IOCL. In addition, the Appellants had also declared Canalization charges @ 1% of the CIF value, at the behest of the Customs Department. Appellants filed documents, for finalization of provisional assessment, such as: (i). IOCL Invoices for FOB value; (ii). Insurance contract notes for freight charges; (iii). Receipts for Port dues; (iv). Contracts among OMCs for imports of LPG (effective 1.4.2002). (v). Contracts with M/s. Finolex for payment of handling charges. (vi). Contracts with Natavar Parekh, for providing additional Tug Revenue raised issues relating to addition of certain expenses on charges, expenses commissions incurred by the appellants and have finalised provisional assessments with or without issue of SCN. 3. Learned Counsel for the appellants has traced the history in respect of Appeal No. C/85434/2008 (Period 1.04.2000 to 31.03.2003) and submitted that * Adjudicat....
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....er back to the Adjudicating Authority with a direction to finalize the provisional assessment. * In remand, before the Learned DCC/ACC, appellants appeared for personal hearings on 30.10.2014 & 25.01.2016, at his insistence, though they pleaded that since the matter was pending before the Hon'ble Tribunal, the de novo adjudication may be kept in abeyance, and made various oral and written submissions in support of the contention that no demand would sustain on finalization of the disputed 18 Bills of Entry. The Assistant Commissioner vide Order-in-Original No. 10/2015-16 dated 31.03.2016, held that the canalization charges are to be added, landing charges are to be calculated at the rate of 1% of the CIF and Bills of Lading quantity to be taken into account for assessment, irrespective of the quantity received in the shore tank. * On an appeal filed by the appellants, Learned Commissioner (Appeals), vide Order-in-Appeals No.PUN-CT-APPII-000-272-17-18 dated 17.11.2017, has upheld the Order-in-Original dated 31.3.2016 and rejected the appeal filed by the Appellants. Hence appeal No. C/85434/2018 filed. 3.1. In respect of Appeal No. C/380/2010, Learned Counsel for the appella....
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....d therefore, 1% landing charges has to be considered under proviso-ii to Rule 9(2) of Customs Valuation Rules, 1988. 4. Learned Counsel for the appellants, submitted, in respect of Appeal No. C/85434/2008 (Period 1.04.2000 to 31.03.2003), that canalization charges were not includable; shore tank quantity has to be taken for computation of duty, based on Hon'ble Supreme Court judgment in the case of Mangalore Refinery & Petroleum 2015 (323) ELT 433 (SC); the Appellants have paid excess duty to the tune of Rs. 55,30,051, if the canalization charges are excluded and duty is computed as per shore tank quantity; the working was given to Learned Commissioner(Appeals); if canalization charges are held includible and duty was computed on shore tank quantity, BPCL would be eligible for refund of Rs. 17,26,173 and that BPCL are entitled to suo moto refund on finalization of the assessment. He submitted that Hon'ble Tribunal to allow their appeal and set aside the impugned Orders, with consequential relief. 5. Learned Authorised Representative has reiterated the findings of OIO and submitted as follows 5.1. Landing Charges: Clause 4.4 of the agreement between BPCL and M/s. Finolex ....
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.... importation and associated equipments; landing fees, receiving facilities, berthing fees, tug charges, pipe line for transportation of LPG from Wharf to storage tanks, unloading from vessel to jetty through unloading arms into pipe line, etc. are includable in the assessable value, when major portion thereof would relate to post clearance of LPG on payment of duties; (ii). Whether the Canalization charges paid to M/s. Indian Oil Corporation Ltd. (canalizing agent), are to be added to the price to arrive at the assessable value; (iii). whether shore quantity or invoice quantity of the liquid cargo has to be considered for valuation and computation of import duties. (iv). Whether suo motu refund has to be granted in terms of Section 18(2) of Customs Act, 1962 on finalization of assessment, since the period is prior to 13.7.2006; (v). Whether interest can be levied prior to insertion of sub-section (3) of Section 18 of Customs Act, 1962, with effect from 13.07.2006, on duty payable on finalization of assessment or when duty is paid before finalization. 6.1. Regarding which quantity, shore tank quantity or ullage quantity, is required to be taken for the purposes of assess....
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....ng fresh water, fuel etc. to the ship will be recovered directly by FIL/ their agents from the ships agents and in case of ships agent failure to pay within two months, from BPCL. Further, it provides that these import handling charges are based on the following rates: * Landing fees @ Rs. 5 per MT on certified alleged quantity. * Berthing fees @ Rs. 0.40 per MT of ship's NRT * Tug attendance charges of Rs. 2000/- (for one incoming and outgoing trip Ongoing through the attachment 1 to the agreement, it is seen that the license fees is paid for various facilities like Jetty, unloading arms, LPG tanks, tank lorry system, utilities and safety/ fire protection facilities. All these charges are not in the nature of pre-importation charges, therefore, all of them are not includable in the assessable value in terms of Rule 9(2)(b) of Customs Valuation Rules, 1988. Each of these expenses are to be separated and those items of expenses which pertain to import handling charges, handling fee, berthing fee and tug attendance fee which are in the nature of pre-importation cost only need to be included. Items of cost or expenditure with regards to the constructions and maintenance of ....