ORDER
T.K. Jayaraman, Member (T)
1. Revenue has filed these appeals against the following Orders-in-Appeals passed by the Commissioner of Customs and Central Excise (Appeals), Visakhapatnam.
(i) OIA No. 4/2006 (V-II) Cus. dated 17.1.2006
(ii) OIA No. 5/2006 (V-II) Cus. dated 17.1.2006
(iii) OIA No. 6 & 7/2006 (V-II) Cus. dated 17.1.2006
2. Shri G.L. Rawal, learned Sr. Advocate and Shri Rajesh Rawal, learned advocate appeared on behalf of the Respondent. Shri K. Sambi Reddi, learned JDR appeared on behalf of the Revenue.
3. We heard both sides. The issue in these appeals relates to the question of assessment of bulk liquid cargo. The Respondents imported bulk liquid cargo which is crude oil. In first two cases relating to Orders-in-Appeal No. No. 4 & 5 /2006, the Respondent paid duty on the basis of the shore tank quantity. In the other case relating to OIA No. 6 & 7, even though the respondents discharged the duty liability based on the ship ullage report, later they filed refund claim on the basis of various decisions and Board’s instructions, which held that duty should have been paid only on the basis of the shore tank quantity. The Original Authority in the first case demanded differential duty on account that during the relevant period in terms of the Board’s instructions, the respondent ought to have discharged the duty liability only on the basis of the ship ullage quantity. Therefore, the differential duty was demanded. The Respondent approached the Commissioner (A) and the Commissioner (A) passed the impugned orders No. 4 & 5/2006 in favour of the respondents setting aside the demand of differential duty. In respect of the other order, the refund claim was rejected by the lower authority. However, the Commissioner (A) after taking into account the facts of the case and various judicial decisions including the Apex Court decision and also the Board’s instructions which is based on the Apex Court decision came to the conclusion that the Respondents are entitled for the refund and he had also examined the unjust enrichment aspect and allowed the appeals of the respondent.
4. Revenue is aggrieved over the decision of the Commissioner (A) on the following grounds.
According to the Revenue, the Respondent in the first two appeals discharged the duty liability on the basis of shore tank quantity. It is contention of the Revenue that prior to Board’s instruction dated 24.6.2003, duty was discharged only on the basis of the ship ullage quantity. Therefore, before the introduction of the new procedure, quantification of cargo as per ship ullage report by the lower authority is proper and legal. The other contention taken by the Revenue is that the Apex Court in the case of H.M. Bags Manufacturer v. CCE has observed that the circular/order passed under Section 37B of the Central Excise Act, 1994 is effective from the date of its Notification or Publication.
4.1 With regard to the other appeal, the grounds of appeal by the Revenue are as follows.
The importer has not disputed the onboard ullage in respect of the Bills of Entry detailed in Speaking Orders No. 15/2005 and 16/2005 both dated 24.6.2005 and they have finally assessed accordingly. The goods were cleared for home consumption and taken out of customs charge and therefore, the assessment on shore tank measurement is irrelevant. The shore tank ullage was presented by the assessee for claim of refund and no official person was present at the time of taking the DIP measurements at the shore tank. The assessee has filed the refund claim before the finalization of the Bills of Entry. The Apex Court in the case of Priya Blue Industries v. CC (Prey.) has made it clear that claim of refund cannot be maintained unless the order of the assessment has been challenged. The quantification of cargo as per ship ullage report by the lower authority is proper and legal. The Apex Court in the case of HM Bag Manufacturer v. CCE (supra) has observed that circular/order passed under Section 37B of the Central Excise Act, 1994 are effective from the date of its Notification or Publication.
5. The learned advocate pointed that the respondent was correct in law in adopting the shore tank quantity for the purposes of assessment. In this connection, he relied on the following case laws.
(i) Acalmar Oils and Fats v. CC, Hyderabad (Tri.)
(ii) CC, Visakhapatnam v. Asia Pacific By Final Order No. 370/2007
(iii) CC, Mumbai v. HPCL
(iv) National Organic Chemical v. CC, Mumbai
(v) CC, Visakhapatnam v. HPCL
(vi) CC, Mumbai v. National Organic Chemical 2002 (142) ELT A-280
(vii) MRPL v. CCE, Bangalore
(viii) Agarwal Industries v. CC, Hyderabad
(ix) BPCL v. CC, Mumbai
5.1 Further, with regard to the granting of refund, the learned advocate relied on the following case laws.
(i) Karnataka Power v. CC, Chennai
(ii) Goa Shipyard Ltd. v. CC, Sahar 2006 (72) RLT 479 (Tri.)
(iii) Whirlpool of India v. CC, Mumbai 2007 (211) ELT 223 (Tri.)
(iv) Kudremukn Iron and Steel v. CC, Bangalore By Final Order No. 583/2007 (Tri.)
(v) Technosales Corpn. v. CC, Bangalore 2006 (200) ELT 296 (Tri.)
(vi) Jindal Vijayanagar Steel v. CC, Mangalore 2006 (206) ELT 529 (Tri.)
(vii) CCE, Cohin v. OEN India Ltd. 2006 (202) ELT 836 (Tri.)
6. We have gone through the records of the case very carefully. The issue of assessment in respect of bulk liquid cargo is no longer res integra. It is now well settled that the assessment has to be done on the basis of the shore tank quantity. All the decisions relied on by the learned advocate for the respondent clearly state that in respect of the bulk liquid cargo, assessment has to be done only on the basis of the shore tank quantity. The learned Commissioner (A) has considered all the aspects into account and he has clearly held that the respondents are entitled for the refund claim. He had also dealt with the contention of the Revenue that the respondent had not challenged the assessment and therefore, they were not entitled for the refund claim. In other words, Revenue contends that without challenging the assessment, refund claim cannot be filed. After going through the records, the Commissioner (A) has come to the conclusion that even before the assessments were finalized and when they were provisional, the respondent contended that duty should be paid only on the basis of the shore tank quantity in terms of the various decisions and board’s instruction and therefore, they filed refund claim. But, the refund papers filed by the respondents were returned by the department. Therefore, it cannot be said that the respondent did not challenge the assessment. In fact no action was taken on the refund claim and assessment was finalized based on the ship ullage.
7. In view of this, the Revenue’s grounds of appeal do not have any merit. The Commissioner (A) has relied on various judicial decisions and also Board’s circular which was based on the Apex Court’s decision in the case of NOCIL India Ltd. in Civil Appeal No. 6764/1999, which has actually upheld the Tribunal’s order that custom duty is leviable on the on-shore tank receipt cargo and not as per ship ullage report. In these circumstances, there is no merit in Revenue’s appeals and we reject the same.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)