TMI Blog2004 (3) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... rated in Writ Petition No. 1977 of 1992 (Godrej Industries Ltd.) are set out hereinbelow. 4.Godrej Industries Limited manufactures soaps, toiletries detergents, chemicals, etc. In the normal course of business they import different kinds of oils, fats, etc. in bulk (bulk liquid cargo) as raw materials. For decades the petitioners have been obtaining delivery of liquid cargo directly from the vessel into the tank lorries and the respondents have been granting remission of duty if the quantity received as per the B.P.T. Weigh-bridge report is less than the quantity set out in the Bill of Lading. According to the petitioners, the quantity determined on the basis of the B.P.T. Weigh-bridge certificate represents the correct quantity delivered. Some time in August/September, 1992, when the petitioners were about to file the bills of entry in respect of the bulk liquid cargo imported by them from Indonesia/Malaysia, the petitioners were informed that in view of the Public Notice No. 49, dated 30th March, 1992 issued by the Collector of Customs, Mumbai, the customs duty will not be levied on the basis of the B.P.T. Weigh-bridge report but on the basis of the quantity determined as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, in view of public notice dated 30-3-1992, the petitioners are required to pay the customs duty on 649.612 MT being the quantity determined under ullage report even though quantity actually received is only 642.600 M.T. Accordingly, it was submitted that the quantity determined under the ullage report cannot be made the basis for levy of customs duty. 6.Mr. Dada further submitted that all these years, the bulk liquid cargo discharged directly from the ship into the tanker lorries were weighed on the B.P.T. Weigh-bridge and the certificate issued by the B.P.T. Weigh-bridge was taken into account for remission of duty in case any quantity is lost or destroyed. Mr. Dada submitted that in view of the impugned public notices/circular the petitioners would be deprived of remission of duty and the duty assessed as per the ullage report would be final. 7.Mr. Dada further submitted that the CBEC Circular No. 96/02, dated 27th December, 2002 has been issued by misreading the orders of the CEGAT. In the case of Commissioner of Customs, Mumbai v. Hindustan Petroleum Corpn. Ltd. reported in 2000 (121) E.L.T. 109 (T), CEGAT noted that ullage report is made in the absence of any precis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Customs do not have control over the tank lorry and the physical weighment is done by the importers at the B.P.T. Weigh-bridge for their own safety against theft or pilferage. Therefore, B.P.T. Weigh-bridge report is not relevant for the purpose of assessment of duty of bulk liquid cargo cleared from the vessel directly into tank lorries. 9.Mr. Jetley further submitted that the impugned Circular No. 96/02, dated 27-12-2002 has been issued by the C.B.E.C. after examining the matter in the light of the decision of the Apex Court in the case of NOCIL (supra). 10.Mr. Jetley further submitted that in the case of palm acid oil on arrival of the ship immediately after the ullage survey the oil is discharged into the tank lorries and once all the tank lorries are loaded, another Ullage Survey termed as "after discharge" is carried out. The difference between the 'before discharge ullage survey report' and after the discharge ullage survey report is taken to ascertain the oil actually discharged into the tanker lorries. These tanker lorries are taken to B.P.T. Weigh-bridge after obtaining out of charge from the proper officer. Since there is no time gap left between the pre-discha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay), the issue before this Court was whether the Customs authorities could levy penalty on the person in charge of the conveyance and their agents under Section 116 of the Customs Act, 1962 solely based on the outturn report given by the Bombay Port Trust. It was held that the ship owner had no control after the goods left its permanent hose connection and, therefore, the ship owner cannot be made liable for the short landing of goods based on the outturn report prepared by the Port Trust authorities. While disposing of the said petition, in the public interest and by consent of the appearing Counsel for the parties, guidelines were laid down by this Court for determining the quantity discharged from ship/vessel. The guidelines laid down by this Court in respect of bulk liquid cargo are as follows :- "(A) Liquid Cargo in bulk :- (1) The quantity shown in the Bill of lading reflected in the Import General Manifest should be prima facie accepted as the cargo on board the vessel brought for unloading at the Port of Bombay. (2) In case, the person-in-charge of the ship or his Agent produces the ullage survey report prepared at the Port of loading and certified by an indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through regular pipelines and cleared directly on payment of duty under a white Bill of Entry, i.e. without the cargo being warehoused in a shore tank. The point raised is how to determine the quantity in such cases. It needs to be mentioned here that though the CEGAT order in case of M/s. HPCL relates to a situation of bonded tanks in a warehousing scenario, it would nevertheless be applicable in a situation of home consumption shore tank discharge which is under custodial/customs control. In such situations, the port/custodian would be issuing reports for quantity actually received. In the light of the guidelines of CEGAT orders referred to above, it has been felt that it is this quantity which should be taken into account for the purposes of levy of duty. However, in a situation where there is no facility of measurement at the port, i.e., bulk liquid cargo, which is not discharged through regular pipelines and cleared directly on payment of duty under a white Bill of Entry, i.e. without the cargo being warehoused in a shore tank, assessment may continue to be done as per ship's ullage survey report. In the light of above, I am directed to7. convey that in case of all bulk liq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not justified in issuing public notice/circular directing the assessing authority to adopt the ullage report for assessing the bulk liquid cargo discharged directly into tank lorries. 18.In the case of M/s. Varun Shipping Co. Ltd. v. Govinddas S. Thampi Ors. (Writ Petition No. 602 of 1980 decided on 16-1-1984) 1989 (42) E.L.T. 204 (Bom.) this Court has held that the measurement by ullages is a recognised method. The said decision has been consistently followed by this Court in large number of cases. It is true that in all those cases the issue pertained to the levy of penalty under Section 116 of the Customs Act, 1962. Even the CEGAT in the case of NOCIL (supra) or in the case of Hindustan Petroleum Corporation Ltd. has not held that the quantity determined on the ullage method should be totally discarded. It may be that the ullage report is made in the absence of any precise measurement. But nonetheless it is a recognised method and in the absence of any other recognised method which gives more accurate results, the quantity determined as per the ullage can be taken into account for the purpose of assessment. 19.In these circumstances, we hold that the public notices an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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