TMI Blog2018 (5) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... sary to go into the various nuances of the matter as we are of the opinion that these appeals are bound to fail on one simple ground. The assessment is to be made on the basis of quantity of crude oil actually received in the shore tanks in the port of arrival in India. Valuation - inclusion of demurrage charges for the purposes of valuation of crude oil - Held that: - The demurrage charges are admittedly incurred after the goods reached at Indian ports and, therefore, it is a post-importation event. Such charges, therefore, cannot form part of the transaction value - demurrage charges are not includable in the transaction value of the crude for the purposes of assessment. Appeal allowed - decided in favor of appellant. - C/Early Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we proceed to decide the issue on merits as the issue lies in a narrow compass. 2. The appellant has filed these appeals against the impugned Orders-in-Appeal, all dated 4.6.2014. 3. Brief facts of the case are that the appellant is a public sector refinery and had filed various Bills of Entry for clearance of crude oil. Dispute arose about the duty of customs to be levied on the liquid bulk cargo not received in the shore tanks. The Revenue was of the view that the assessment and valuation of the goods should be based on the transaction value declared in the invoice price irrespective of the quantity ascertained through shore tank measure or in other manner. The other dispute was whether the demurrage charges incurred by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (ii) the inclusion of demurrage charges for the purpose of valuation under the Customs Act, 1962. As rightly pointed out by the Learned Advocate, on both the issues the Hon'ble Supreme Court has declared the law in favour of the assessee. On the issue of levy of duty of customs on the liquid cargo not received in the shore tank, the Hon'ble Supreme Court in the case of Mangalore Refinery Petrochemicals Ltd. vs. CCE, Mangalore (supra) has held as below: 14. The Tribunal's judgment dated 6th 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted occurring in Section 12 and this can only mean that the moment goods have entered the territorial waters the import is complete. We do not agree with the submission. This Court in its opinion in Bill to Amend Section 20 of the Sea Customs Act, 1878 and Section 3 of the Central Excises and Salt Act, 1944, Re [AIR 1963 SC 1760 = (1964) 3 SCR 787 sub nom Sea Customs Act (1878), S. 20(2), Re] SCR at p. 823 observed as follows. Truly speaking, the imposition of an import duty, by and large, results in a condition which must be fulfilled before the goods can be brought inside the customs barriers, i.e., before they for in part of the mass of goods within the country. It would appear to us that the import of goods into India woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 12 of the said Act. Even when the measure talks of value of imported goods, it does so at the time and place of importation, which again is lost sight of by the Tribunal. And last but not the least, transaction value which occurs in the Customs Valuation Rules has to be read under Rules 4 and 9 as reflecting the aforesaid statutory position, namely, that valuation of imported goods is only at the time and place of importation. The Tribunal's reasoning that somehow when customs duty is ad valorem the basis for arriving at the quantity of goods imported changes, is wholly unsustainable. Whether customs duty is at a specific rate or is ad valorem makes not the least difference to the above statutory scheme. Customs duty whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra) has held as below: 5. We have heard the counsel for the parties at length. It is not even necessary to go into the various nuances of the matter as we are of the opinion that these appeals are bound to fail on one simple ground. The demurrage charges are admittedly incurred after the goods reached at Indian ports and, therefore, it is a post-importation event. Such charges, therefore, cannot form part of the transaction value. Issue in this behalf is settled by this very Bench in the case of Commissioner of Customs, Ahmedabad v. M/s. Essar Steel Ltd., 2015 (319) E.L.T. 202 (S.C.). By following the above judgment, we hold that demurrage charges are not includable in the transaction value of the crude for the purposes of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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