Customs Duty on Bulk Liquid Imports to Be Based on Shore Tank Quantity: CESTAT Directs Apply Relevant Laws at Time of Import If Data is Missing [Read Order]
CESTAT held that when shore tank data is missing, customs duty on bulk liquid imports must be assessed by applying the laws and circulars in force at the time of import
The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) dealt with the question of how customs duty on bulk liquid imports should be assessed when shore tank data is not available.
The case arose from multiple appeals filed by Reliance Industries Limited concerning imports made during 2006–2007. The company disputed the basis of duty calculation, arguing that reliance on ship ullage measurement was incorrect and that the applicable circulars and law in force at the time of import should govern the assessment.
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The appellant’s counsel argued that the CBEC Circular No. 06/2006-Cus, dated 12 January 2006, was in force at the relevant time and it required invoice price for ad valorem duty assessments. They submitted that later circulars such as Circular No. 34/2016 could not be applied retrospectively.
The counsel also argued that the Supreme Court’s judgment in Mangalore Refinery and Petrochemicals Ltd. (2015) only dealt with shore tank receipts but was silent on the use of ship ullage data, making it unsuitable to resolve the present issue.
The revenue counsel countered that duty should be based on the actual quantity of goods received into India, and that later legal developments, including the Supreme Court decision, clarified that shore tank quantity is the decisive measure. They argued that invoice quantity could not reflect the true imports and that the department’s assessment was justified.
The two-member bench comprising Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member) observed that the principle laid down in Mangalore Refinery confirms that shore tank quantity represents the actual import for assessment purposes. The tribunal also observed that in this case the shore tank quantity was not available, and the Supreme Court judgment did not specifically address ship ullage data.
The tribunal explained that in such circumstances, the relevant laws and circulars that were applicable on the date of import must be followed. It pointed out that assessments cannot rely on later circulars or decisions when the governing instructions at the time prescribed a different basis. The matter was remanded to the adjudicating authority with directions to re-examine the assessments by applying the law and circulars in force during 2006-2007.
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