TMI Blog2015 (9) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... are that quantity of crude oil actually received into shore tank in port in India should be basis for payment of customs duty – Appeals disposed of – Decided in favour of assesse. - Civil Appeal No. 2753 of 2006, Civil Appeal No.1109 OF 2007, Civil Appeal Nos. 6736-6773 OF 2015, (Arising Out Of S.L.P. (C) Nos. 1906-1943 of 2009) - - - Dated:- 2-9-2015 - A. K. Sikri And R. F. Nariman, JJ. Civil Appeal No. 2753 of 2006, Civil Appeal No.1109 OF 2007, Civil Appeal Nos. 6736-6773 OF 2015, (Arising Out Of S.L.P. (C) Nos. 1906-1943 of 2009) Civil Appeal Nos. 4738-4755 of 2010, Civil Appeal Nos. 4770-4806 of 2010, Civil Appeal Nos. 4808-4809 of 2010, Civil Appeal Nos. 5465-5562 of 2010, Civil Appeal Nos. 7774-7775 of 2011, Civil Appeal No. 11357 of 2011, Civil Appeal Nos. 8666-8667 of 2013, Civil Appeal No. 3628 of 2015, Civil Appeal No. 5074 of 2015, Civil Appeal No. 5052 of 2015, Civil Appeal Nos. 9279-9283 of 2012, Civil Appeal Nos. 4480-4486 of 2014 For the Petitioner : Mr M P Devanath, Adv. For the Respondent : Mr Ashok Kumar Panda, Sr. Adv., Mr B Krishna Prasad, Adv. and Mr Arvind Kumar Sharma, Adv. JUDGMENT R. F. Nariman, J. 1. Leave granted in Specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore the transaction value of the said goods would only be as per the payment made of the amounts stated in the bill of lading and not the quantity received ultimately in the shore tanks at ports in India. 5. An appeal filed to CESTAT was dismissed on 6 th February, 2006. The Tribunal accepted the Commissioner's reasoning. 6. Shri Lakshmikumaran, learned counsel appearing for the appellants in these appeals, urged before us that the Tribunal in the present case had lost sight of the fact that the taxable event is only when goods are imported, and that therefore valuation at the time of import alone has to be looked at. He further argued that the reasoning of the Tribunal was entirely fallacious, and that it misconstrued Section 14 of the Customs Act and did not give proper heed to Sections 12, 13 and 23 of the said Act. In any event, he argued that transaction value which is laid down under the Customs Valuation Rules cannot be read in such a manner that it would go contrary to the provisions of the parent statute. 7. Ms. Pinky Anand, learned Additional Solicitor General appearing on behalf of the revenue, supported the judgment of the Tribunal and argued that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost otherwise than as a result of pilferage or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Custom or Deputy Commissioner of Customs shall remit the duty on such goods. (2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods in a warehouse under section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. Section 47. Clearance of goods for home consumption.- (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. (2) Where the importer fails to pay the import duty under sub-section (1) within two days, excluding holidays from the date on which the bill of entry is returned to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order permitting the deposit of goods in a warehouse is made. Under Section 23(2) the owner of the imported goods may also at any time before such orders have been made relinquish his title to the goods and shall not be liable to pay any duty thereon. In short, he may abandon the said goods even after they have physically landed at any port in India but before any of the aforesaid orders have been made. This again is for the good reason that the act of importation is only complete when goods are in the hands of the importer after they have been cleared either for home consumption or for deposit in a warehouse. Further, as per Section 47 of the Customs Act, the importer has to pay import duty only on goods that are entered for home consumption. Obviously, the quantity of goods imported will be the quantity of goods at the time they are entered for home consumption. 11. Even under Section 14 of the Customs Act, when goods are to be valued for the purpose of assessment, such valuation is only when the goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade. It is thus seen that under the Customs Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by sea stuffed in a container for clearance at an Inland Container Depot or Container Freight Station, the cost of freight incurred in the movement of container from the port of entry to the Inland Container Depot or Container freight Station shall not be included in the cost of transport referred to in clause (a). 13. This Rule merely restates what is already stated in Section 14, namely, that the value of imported goods has to be the value of such goods for delivery only at the time and place of importation. Therefore, it is clear that even a reading of transaction value under the Rules would necessarily arrive at the same result, namely, that the quantity of goods to be seen for purposes of valuation can only be after they are imported, that is, brought into India and have to be so at the time and place of importation. 14. The Tribunal's judgment dated 6 th February, 2006 gives several reasons for arriving at the conclusion that the bill of lading quantity alone is to be looked at for the purpose of determining the value of goods imported. The first reason that it gives is that duty has to be on the total payment made by the assessee irrespective of the quantity r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption is filed. [at paras 17 and 18] 16. Secondly, the taxable event in the case of imported goods, as has been stated earlier, is import . The taxable event in the case of a purchase tax is the purchase of goods. The quantity of goods stated in a bill of lading would perhaps reflect the quantity of goods in the purchase transaction between the parties, but would not reflect the quantity of goods at the time and place of importation. A bill of lading quantity therefore could only be validly looked at in the case of a purchase tax but not in the case of an import duty. Thirdly, Sections 13 and 23 of the Customs Act have been wholly lost sight of. Where goods which are imported are lost, pilfered or destroyed, no import duty is leviable thereon until they are out of customs and come into the hands of the importer. It is clear therefore that it is only at this stage that the quantity of the goods imported is to be looked at for the purposes of valuation. Fourthly, the basis of the judgment of the Tribunal is on a complete misreading of Section 14 of the Customs Act. First and foremost, the said Section is a section which affords the measure for the levy of custom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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