TMI Blog2022 (4) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... say water is filled in a bucket under a tap with high pressure, there will be some turbulence when filling and bubbles will come up. The quantity of the water in the bucket can only be measured after bubbles settle and the turbulence stops. Similarly, when oil is pumped using heavy duty pumps from the ship to the tanks, some turbulence ensues and some froth will also develop. Needless to say that the quantity of the liquid can only be measured accurately only after the liquid settles. Accurate dip measurement in the tanks and the temperature at the time of such measurement which form the basis for calculating the quantity of the liquid are possible only after the liquid settles. It is not understood how the Revenue can find fault on any direction that the measurements be taken before the turbulence ends and liquid settles. Evidently, any measurement before the liquid settles is likely to be erroneous resulting in wrong quantities being recorded than what is present in the tanks. Revenue cannot seek to collect duty based on such quantities. The commissioner has correctly mentioned in the public notice that the dip measurement must be taken after liquid is settled. Appeal dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the quantity of the liquid can be calculated. 3. One more uncertainty remains when the liquid is pumped into the tanks at high pressure. The liquid continuously swirls and exhibits turbulence. Often, bubbles or foam are also formed at the top. Both the turbulence and foam may affect the dip measurements. Therefore, the measurements must be taken after the liquid settles in the tank. 4. The question which arises is whether ullage report or the shore tank report should be reckoned for determining the customs duty. It has been decided by the Hon ble Supreme Court in the case of Commissioner of Customs Vs. National Organic Chemical Indus. Ltd [ 2002 (142) ELT A280(SC) ] that the shore tank report must be considered for determining the duty and not the ullage report. After this order of the Supreme Court, the CBEC has issued Circular No. 96/2002-Cus dated 27 December 2002 directing as follows: 7. In the light of above, I am directed to convey that in case of all bulk liquid cargo imports, whether for home consumption or for warehousing, the shore tank receipt quantity should be taken as the basis for levy of customs duty. Pending provisional assessments may be finalized a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y indicated in the into bond bills of entry filed as per the ullage report and, therefore, duty has to be paid of the short fall. 7. It is undisputed that on the same issue, in respect of the same party, this Tribunal had, by Final Order Nos. 31476- 31478/2017 dated 4.9.2017, decided that the duty has to be paid only on the shore tank receipt. It was further held by this Tribunal that the quantity in the shore tank must be reckoned taking dip measurement and temperature after the cargo is settled. Following the order of this Tribunal, the Commissioner (Appeals) has held in favour of the respondent. Revenue has aggrieved by these orders on the following grounds: (i) The CESTAT s Final Order dated 4.9.2017 is being contested by the Department by filing an appeal before the High Court of Andhra Pradesh; (ii) In the Final Order dated 4.9.2017, the Tribunal has relied upon CESTAT s previous Final Order dated 23.6.2017 on the same issue. However, no appeal has been filed by the Revenue against this order dated 23.6.2017 only on monetary limits; (iii) Although the Board s Circular dated 27 December, 2002 has advised that assessment of bulk cargo should be done on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled by the Supreme Court and also accepted by the Board that when liquid cargo is imported, shore tank quantity should be considered for assessment of duty and not ullage report. The previous orders of this Tribunal followed the same. In some cases the orders of this Tribunal were also not challenged by the Revenue. The learned Commissioner (Appeals) has followed the order of this Tribunal as he is bound to as per judicial discipline. The argument of the Revenue is that the Commissionerate has now decided to challenge one of the previous orders of this Tribunal. Hence these appeals. To put the appeals in perspective, Revenue s case is that since they decided to file an appeal against one of the orders of the Tribunal: a. Commissioner (Appeals) should have defied the orders of this Tribunal b. He should not have followed the law laid down by the Supreme Court in the case of National Organic Chemical Indus. Ltd. c. He should have defied the Board s circular No. 96/2002-Cus dated 27 December 2002 issued based on the judgment of the Supreme Court in National Organic Chemical Indus. Ltd. d. He should have upheld the demand of duty on the basis of the ullag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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