AI Drafter 
TaxTMI 
TaxTMI 
2025 (6) TMI 612
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.... ORDER SOMESH ARORA: The brief facts of the case are that during the period April 2006 to March 2007, the Appellant imported 52 consignments of Petroleum Crude Oil at the Port of Sikka and sought clearance thereof by filing the following Bills of Entry: No. Bills of Entry No. Date of Bill of Entry 1. F-03 04.04.2006 2. F-05 07.04.2006 3. F-06 07.04.2006 4. F-07 07.04.2006 5. F-11 12.04.2006 6. F-13 15.04.2006 7. F-18 21.04.2006 8. F-25 26.04.2006 9. F-27 29.04.2006 10. F-31 03.05.2006 11. F-33 05.05.2006 12. F-39 12.05.2006 13. F-48 18.05.2006 14. F-49 18.05.2006 15. F-62 09.06.2006 16. F-63 09.06.2006 17. F-68 14.06.2006 18. F-80 01.07.2006 19. F-89 08.07.2006 20. F-95 12.07.2006 21. F-97 13.07.2006 22. F-103 21.07.2006 23. F-107 26.07.2006 24. F-111 28.07.2006 25. F-113 29.07.2006 26. F-156 05.09.2006 27. F-174 21.09.2006 28. F-177 26.09.2006 29. F-180 29.09.2006 30. F-182 03.10.2006 31. F-184 ....
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.... to be assessed on the basis of Ship's Ullage Quantity at the port of discharge as against the bill of Lading quantity. By assessing duty on a value calculated on the basis of Ship's Ullage Quantity instead of the transaction value, the Assistant Commissioner demanded differential duty. 1.4 The Appellant preferred 52 appeals against the said 52 assessment Orders passed by the Assistant Commissioner. By common Order-in-Appeal No. JMN-CUSTM-000-APP-197 to 248-23-24 dated 28.02.2024, the Commissioner (Appeals) rejected all the 52 appeals filed by the Appellant. Aggrieved by the order, appellants have preferred the present appeals. 2. Learned Advocate appearing for the appellant submits that finalization of provisional assessment made in the years 2006 & 2007 after 16 years is vitiated by unreasonable delay and is liable to be set aside on this ground itself. 2.1 In support of aforesaid submission, he cited the decision of Hon'ble High Court in the case of Bihar Foundry & Castings Ltd v UOI and ors- 2024-TIOL-543-HC, in which it has been held that finalization of provisional assessments after 6 to 9 years is vitiated by unreasonable delay and barred by limitation. ....
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....ore it would be in violation of the principles of natural justice to finalize the assessments after so many years. But for the said delay, the assessments would have been finalized in accordance with Circular No.6/2006-Cus dated 12-1-2006, which was in the Appellant's favour and which was in force at the time of import. The delay has therefore clearly prejudiced the Appellant's defence. 2.5 Without prejudice to the aforesaid submissions, in any event, the said decision of the Hon'ble Tribunal in Shakti Beverages Ltd v CC-2003 (153) ELT 445 was rendered when the Customs (Finalization of Provisional) Assessment Regulations 2018 were not in force, whereas in the present case when the assessments were finalized, the said Regulations were in force. Regulation 5 of the said Regulations stipulates the time limit of 2 months from the date of receipt of Test report and submission of documents. Since the Test Reports were received long back in 2006 and 2007 and the documents were also submitted in 2006 and 2007, in any event, the assessment should have been finalized within 2 months from the coming into force of the said Regulations. Reliance is placed in this behalf on the de....
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....vant as it does not represent the actual quantity unloaded in India. 2.10 The Hon'ble Tribunal has in the case of CC v Hindustan Petroleum Corporation Limited-2000 (121) ELT 109 held that the ship ullage quantity does not represent the quantity of goods unloaded/imported into India. The quantity pumped in the shore tanks which represents the quantity imported into India, alone can be assessed to duty. The ship ullage quantity is measured at the point of time when the goods are still on board the ship, when the taxable event has not occurred. The taxable event occurs only in respect of the quantity discharged from the vessel. Department's Civil Appeal No 1098 of 2001 against the said decision of the Hon'ble Tribunal has been dismissed by Hon'ble Supreme Court by Order dated 20-2-2002 as reported in 2002 (142) ELT A280 (SC). 2.11 Merely because the Ship's Ullage report quantity is marginally higher than the Bill of Lading quantity, it cannot be said that this higher quantity was imported unless it is shown that the quantity actually received in the Shore tank was the same as the ullage quantity. The Ship's ullage quantity represents the quantity on the Ship at t....
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....ontinue to be done as per ship's ullage survey report at the port of discharge. As submitted herein above, the Supreme Court decision in Mangalore Refinery and Petrochemicals Ltd v CCE - 2015 (323) ELT 433 (SC) nowhere lays down that assessment has to be done as per ship's ullage survey report. The stipulation in the said Para 4 of the Circular is therefore not based on the said Supreme Court decision. Further, it cannot be applied retrospectively for the present imports which were made in 2006 and 2007. As laid down by the Hon'ble Supreme Court in the case of Suchitra Components Ltd v CCE 2007 (208) ELT 321 (SC), a Circular which is adverse to the importer cannot apply retrospectively. For the period prior to 26-7-2016, CBEC Circular No.6/2006-Cus dated 12-1-2006 was applicable, as per which in all cases where customs duty is leviable on ad valorem basis, the assessment of bulk liquid cargo should be based on invoice price, which is the price paid or payable for the imported goods, i.e., transaction value, irrespective of quantity ascertained through shore tank measurement or any other manner. They rely on the decision of this Tribunal in the case of Asian Solvochem P.....
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....sic Customs Duty, in terms of Notification No. 11/2005-Cus, dated 01.03.2005 (Sr. No. 487) read with Notification No. 32/2005 Cus, dated 08.04.2005 and National Calamity Contingent Duty (NCCD) @ Rs 50 PMT as per Circular No. 22/2006, dated 21.08.2006 and applicable Cesses on BCD and NCCD) for want of original documents, final price and test result. On receipt of original documents and test report from the importer, the goods were finally assessed as per respective Final Assessment Orders considering the Ship's Ullage Quantity at the Port of Discharge, as reflected in the Surveyor's Report relying upon the decision of Hon'ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Ltd Vs C.C., Mangalore (2015 (323) ELT 433 (SC). The appellant's contention was that the Bills of Entry was required to be finally assessed considering quantity shown in Bills of Lading instead of ship's ullage quantity. 3.1 On receipt of original documents from the importer and test report from the Chemical Examiner, CRCL, Kandla, the Bills of Entry were finally assessed considering the Ship's Ullage Quantity at the Port of Discharge, as reflected in the Surveyor's ....
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.... 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. 3.4 Para 4 of the Circular No. 34/2016, dated 26.07.2016 reads as under: "Para 4: Further, where bulk liquid cargo is cleared directly on payment of duty without being pumped it a shore tank, assessment may continue to be done as per ship 'ullage survey report at the port of discharge." From the plain reading of above Para, it is clear that there is direction to continue the assessment as per Ship's Ullage Report at the Port of Discharge. Therefore, contention of the appellant that instruction to adopt ship ullage quantity for assessment of liquid bulk cargo was for the first time contained in Circular No. 34/2016, dated 26.07.2016 is not legally correct and tenable. 3.5 The appellant have also contended that there is unreasonable delay of 16 years in finalizing the provisionally assessed Bills of Entry and the assessment is required to be set aside. The Appellate Authority has gone through the decision of Larger Ben....
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....fore, being post importation event, the same cannot form part of the transaction value, both the SCN's were dropped under OIO No. 19/AC/CHS/2017-18 and 20/AC/CHS/2017-18 both dated 05.04.2018. Further, it was mentioned that, 13 bills of entry as stated in the letter dated 04.04.2025, were finalized under separate Final Assessment Order as shown in column 4 of the below table: Sr. No. B/E/ No. Date FAO No. & dt SCN No. & date/ OIO No. & date 1 2 3 4 5 1. F-008 08.04.06 408/FAO/CHS/2022-23 Dt.29.12.2022 SCN No. VII/48-Demand/28/T/2007-08 Dtd.11.02.2008 OIO No. 19/AC/CHS/2017-18 Dtd.05.04.2018 2. F-064 10.06.06 408/FAO/CHS/2022-23 Dt.29.12.2022 3. F-078 29.06.06 408/FAO/CHS/2022-23 Dt.29.12.2022 4. F-328 20.12.06 408/FAO/CHS/2022-23 Dt.29.12.2022 5. F-396 14.02.07 408/FAO/CHS/2022-23 Dt.29.12.2022 6. F-416 01.03.07 408/FAO/CHS/2022-23 Dt.29.12.2022 7. F-459 23.03.07 320/FAO/CHS/2022-23 Dt.07.12.2022 SCN No. VII/48-Demand/28/T/2007-08 Dtd.29.11.2008 OIO No. 20/AC/CHS/2017-18 Dtd.05.04.2018 8. F-146....
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....tion was within any permissible authoritative norms, if fixed by the department or found in any authoritative literature in the light of submissions made by the appellants. 5.1 It has brought us now to the peripheral issue of whether there was delay in finalizing the provisional assessment, as has been stated by the appellant. It has been argued that the bills of entry were finalized after 16 years of unreasonable delay, despite the Chemical analysis report being available for the show cause notices issued in year 2007 and 2008. The department's contention is that there were 13 Bills of Entry which were only relating to inclusion of demurrage charges, which were eventually decided separately in favour of the party by dropping the proceedings vide two orders-in-original both dated 05.04.2018. These were unrelated to the issue in hand which is related to provisional assessment which were on the basis of quantity and chemical analysis of the product. That both the series of show cause notices were on different legal propositions and there was no bar on issuance of either. The advocate for the appellant however is of the view that res-judicata will apply in relation to these 13 Bill....