2000 (7) TMI 313 - AT - Customs

Summary

Issues Involved: Determination of quantity of liquid cargo for duty assessment based on ullage survey vs. dip measurement in shore tanks.

Summary:
1. The appeal considered the correct method for determining the quantity of liquid cargo, specifically crude petroleum oil, imported in a tanker for duty assessment. The dispute arose when the quantity declared by the importer differed from the quantity determined by an ullage survey. The importer argued for dip measurement in shore tanks as a more accurate method, which was accepted by the Commissioner (Appeals) but challenged by the department.

2. The Commissioner supported dip measurement over ullage survey, citing precedents and emphasizing the importance of precise measurement for duty assessment. The department contended that the quantity determined by the ullage survey upon importation is the quantity liable to duty, as per the Customs Act and relevant guidelines.

3. Referring to Supreme Court judgments, it was established that the taxable event for duty assessment occurs when goods cross the customs barrier, in this case, when the oil is pumped into shore tanks. This criterion determines the quantity of goods subject to duty.

4. The department's grounds of appeal regarding the definition of "import" and reliance on Public Notice No. 49/92 were refuted. The Public Notice was found not to be binding for duty assessment and lacked clarity in its provisions, leading to contradictions in determining the quantity for assessment.

5. The Tribunal upheld the Commissioner's decision that duty should be demanded based on the quantity of oil pumped into shore tanks, dismissing the department's appeal. The order emphasized the importance of accurate measurement methods for duty assessment.

Decision: The appeal is dismissed, affirming that the quantity of liquid cargo pumped into shore tanks is the appropriate basis for duty assessment, as determined by dip measurement.