TaxTMI 
TaxTMI 
2019 (8) TMI 1146
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....in large super tankers which cannot berth in the Port. Therefore, the oil is transferred to smaller vessels called the daughter vessels and transitted to the Port. The appellants filed 28 Bills of Entry between 01.03.194 to 31.03.1997 in respect of consignments received in daughter vessels. It is the allegation in the SCN that they had short paid the duty amounting to Rs. 1,36,78,064/- by not including the freight incurred in respect of daughter vessels. The appellants paid an amount of Rs. 98,79,024/- during investigation itself. A SCN was issued along with a corrigendum demanding duty reckoning the amount which the appellant received from the Oil Co-ordination Committee towards freight as cost of freight of the daughter vessel from the mo....
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....aforesaid manner. 2. If the demand of duty raised in the SCN and the corrigendum thereto was premature for want of finalization of provisional assessments, the proposal for imposing penalty was also likewise. In this context, we must also consider the submission of the appellants that they had no intent to evade payment of duty on the subject goods. During the course of investigations, they had themselves paid duty on 'daughter vessel freight' on a notional basis. What remained to be done was correct determination of the freight to be included in the assessable value. There was no intent to evade payment of duty. Ld. SDR has pointed out that Section 55 of the Customs Act was clear enough to enable the assessee to correctly determin....
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....er under this very Section. (ii) The legal position was unclear during the period and hence payment was not made by the appellant during the relevant period. This was a bona fide belief that duty cannot be payable. This ambiguity is very clear inasmuch as the CBEC themselves debated as to how to deal with the issue of freight of daughter vessels from the mother vessels to the Port and appointed a Committee to go into the matter. Thereafter, Circular No. 04/2006 dated 12.01.2006 was issued, the relevant portion of which is as follows: "4. The above issue was discussed in the Chief Commissioner's Conference held on 1st October, 2005 at Mumbai. The conference agreed that the recommendations of the Shri R.K. Chakraborti Committee sh....
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.... Customs Duty and therefore no penalty should have been imposed upon them. (iv) In respect of 16 Bills of Entry that indicating in the impugned order, the assessment was already finalized and the same should have been re-opened. 4. Learned Counsel for the appellant takes us through the facts of the case and explains that super tankers of oil cannot reach most Ports in India due to lack of required draft in the sea. Therefore, they are invariably stopped on high seas from where the oil is transferred through daughter vessels. The freight charged by the daughter vessels for transporting the crude oil is a complex mechanism and it cannot be easily identified. Therefore, CBEC themselves have formed a Committee headed by Sh. R.K. Chakrabor....
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....om the Oil Pool Committee towards freight. He would urge that the Learned Commissioner, as an officer of the CBEC was bound by the CBEC's Circular which mandates that the WSO rates be reckoned. He fairly submits that they there was a typographical error in the table submitted by them by mentioning wrong PD Bond number but that should not vitiate the entire report. He would submit that if the matter is remanded with specific directions regarding the method to be adopted for calculation of differential duty, he would satisfy the Commissioner with proper figures. He would also pray for setting aside the penalty under Section 114A upon them. 5. Learned Departmental Representative reiterates the findings of the impugned order and asserts the ....