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2016 (9) TMI 565 - CESTAT HYDERABAD

2016 (9) TMI 565 - CESTAT HYDERABAD - 2016 (341) E.L.T. 314 (Tri. - Hyd.) - Foreign Going Vessel - Conversion of vessel to coastal run ship stores inventorised at the time of conversion consumption of provisions during coastal voyage inclusion of local purchase of the quantity of 193.03 MT of fuel in the opening inventory of 678.22 MT of fuel oil ascertainment of the total quantity of fuel oil consumed during the coastal run Held that: - local purchase of the quantity of 193.03 MT of f .....

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neous price of identical goods of which the bunkers were supplied to the same class of buyers during material period. This is the correct and proper manner for finalization of the assessment. - Appeal dismissed decided against appellant revenue. - C/332/2006 - Final Order No. A/30603/2016 - Dated:- 15-7-2016 - Ms. Sulekha Beevi, C.S., Member (JudiciaI) and Shri Madhu Mohan Damodhar, Member(Technical) Shri Ajay Kumar, Asst. Commissioner (AR) for the appellant. None for the respondent. OR .....

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mated quantity of bunkers expected to be consumed during the Vessel's coastal voyage. The Bill of Entry was passed on provisional basis by the Officers as per the provisions of Customs House P.N.93/97 after obtaining P.D. Bond. The Provisional duty was calculated and 110% of the calculated duty was paid by the Appellants as per the provisions of the said PN 93/97. The Vessel was reverted to foreign run at Tuticorin on 9.9.98 and a closing inventory was taken by the customs authorities at Tut .....

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8 was taken up for final assessment and by adopting "first-in-first-out principle" the actual consumption was arrived at by the Officers as below:- Item Opening Inventory (Foreign Origin) Duty paid Bunkers supplied during coastal voyage Total quantity with this supply Closing inventory quantity Actual consumption as per FIRST-IN-FIRST OUT Principle Fuel Oil 678.22 MT 193.03 MT 871.25 MT 299 MT 572.25 MT Diesel Oil 28.39 MT 137.09 MT 165.48 MT 52.5 MT 112.98 MT 1 .2. Since the vessel ha .....

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ant Commissioner of Customs, Visakhapatnam, was issued to the Appellants by the Deputy Commissioner of Customs, Visakhapatnam, alleging therein a short payment of ₹ 12,69,193/- on finalisation of the provisional assessment. The Show Cause Notice dated 26.07.2001 proposed as to recover the short collection of duty of ₹ 12,69,193/- from the respondents. 1.3. The aforesaid Show Cause Notice was adjudicated upon by the Deputy Commissioner of Customs, Visakhapatnam vide Order-in-Original .....

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certain the total quantity of Fuel Oil consumed during the Coastal run. He also accepted the respondents' contention that the Adjudicating authority had erred in adopting the "FIRST-IN-FIRST-OUT PRINCIPLE" for calculating the quantity of Oil allegedly consumed during the coastal voyage of the vessel basing on the Customs Public Notice No.93/97 which was issued by Visakhapatnam Custom House on November 24/25th 1997. In this Public Notice it was nowhere mentioned that "FIRST-IN- .....

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ce before the adjudicating authority that they have consumed the entire duty paid stock which procured during the coastal voyage. The principle of First-in-First-out is relevant for arithmetical calculation for ascertaining the quantity consumed during the coastal voyage as both stocks (duty free and duty paid) are available during the coastal voyage. The above principle is widely using in different occasions and different aspects. The Circular No. 129/40/95-CX dt. 29.5.1995 issued by Board on t .....

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uming that the quantity of 572.25 MT of Fuel Oil consumed during the coastal voyage including the duty paid stock. The observations of the appellate authority is not correct as the opening balance of the Fuel Oil (Foreign Origin) was 678.22 MT and the quantity consumed during the coastal voyage was 572.25 MT i.e. less than the opening balance and still balance quantity was available at the time of reversion to Foreign run. Hence, the closing balance of Fuel Oil 299 MT includes the duty paid carg .....

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balance i.e. 28.39 MT. Since the formula adopted by the Commissioner (Appeals) not applied uniformly, the same may not be considered as legal and proper. 3. During the hearing Id AR, reiterated the grounds of appeal. 4. Respondent was absent and there was no representation on behalf of respondent inspite of notice. Being an old matter, the case was taken up for disposal. The respondent has filed cross objections, inter alia, submitted the following: i. The concept of vessel converting to Coasta .....

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n be consumed duty free, on board a foreign going vessel. ii. This Delhi High Court in the case of Great Eastern Shipping co. Ltd (GESCO) vs Union of India [1986 (25) ELT 171] has held Bunkers or goods remaining the ship is not liable to import duty. It is only goods intended to be unloaded that are liable to duty. iii. Appellant appears to have heavily relied on Vizag Custom House Public Notice Nos. 93/97; 129/95; 261/2000. When there is no statutory backing to First-in First-out (FIFO) princip .....

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he Bonded Storage Tanks. The facts of this case are entirely different from the above two circulars and are therefore squarely inapplicable. vi. These two Circulars now submitted by the learned Appellant were not agitated upon or relied upon, either in the Order-in-Original or in the Departmental Appeal before the learned First Appellate Authority. Therefore raising this issue' at the Second Appellate stage is not permissible. 5. We have perused the records carefully. 6. On going through the .....

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