M/S Indian Oil Corporation Ltd vs Commissioner Of Customs, Kandla

Appeal No.C/5/2007-DB [Arising out of OIA No.247/06(147-AHD)Cus/Commr(A)/Ahd, dt.25.09.2006, passed by Commissioner of Customs (Appeals), Ahmedabad]

M/s Indian Oil Corporation Ltd Appellant

Vs

Commissioner of Customs, Kandla Respondent

Represented by:

For Appellant: Shri Sachin Chitnis, Advocate For Respondent: Dr. J. Nagori, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial) Honble Mr. P.M. Saleem, Member (Technical)

1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. P.M. SALEEM, MEMBER (TECHNICAL)

Date of Hearing/Decision:07.07.2015

Order No. A/10965 / 2015, dt.07.07.2015

Per: P.K. Das

Heard both the sides and perused the records.

2. The Appellants were engaged in import of Motor Spirit and High Speed Diesel through the port of Kandla during the year 2005. The issue involved in this case is whether the Customs duty under Section 12 of Customs Act, 1962 is to be charged on the invoice value or on the basis of quantity of goods received in the shore tank in the cases of import of bulk liquid cargo as claimed by the Appellant. The other issue is addition of duty computed under the Finance Act for arriving at the value for the purpose of determining the Additional Duty of Customs under Section 3 of the Customs Tariff Act, 1975.

3. We find that the Tribunal in the case of Hindustan Petroleum Corporation Ltd Vs CC Kandla  2012 (384) ELT 534 (Tri-Ahmd), decided both the issues against the importer/appellant. For the purpose of proper appreciation of the case, the relevant portions of the said decision are reproduced below:-

7.?We find that the transaction between the appellant and the overseas supplier of MS/HSD is based upon the invoice which has been generated for the supplies of the goods. The appellant has never denied the fact that the appellant is paying the price indicated in the invoice, even if they had received lesser quantity and the transaction value remains the same. In our considered view, even if appellant would have received lesser quantity of the goods in the shore tanks, the invoice value charged and paid by the appellant would be the correct value unless there is a clear evidence that they have paid less amount or they have paid the value/price for the quantity received in shore tanks. In the absence of any such evidence, we find that the judgment of the Tribunal in the case of Mangalore Refinery and Petrochemicals Ltd. - 2006-TIOL-325-BANG. = 2006 (205) E.L.T. 753 (Tri.-Bang.) would squarely cover the issue in favour of the Revenue. We find that this judgment was approved by the Apex Court.

8.?As regards the value to be arrived at for the additional duty of customs, we find that the first appellate authority has correctly analysed the law which we may reproduce :

13.?The second issue raised by the appellant is regarding computation of additional duty of Customs. The Additional Duty of Customs levied under section 116 of the Finance Act, 1998/99 as amended from time to time, is a duty levied under Finance Act. Even if the imported goods are exempted from payment of duty of customs chargeable under Customs Act, 1962 or Additional Duty chargeable under Section 3 of the Customs Tariff Act, 1975, the same will not imply that the goods will also he exempted from payment of additional duty chargeable under Section 116 of the Finance Act. This additional duty computed under the Finance Act has to be included in the value of the goods for arriving at the value for the purpose of determining the Additional Duty of Customs under Section 3 of the Customs Tariff Act, 1975. As rightly pointed out by the appellant, the charging section for the Additional duty of Customs is Section 3 of the Tariff Act. Sub-section (2) of the same Act stipulates the mechanism for arriving at the value of the goods, which are liable to such duly. Relevant portion of Section 3(2) of the Customs Tariff Act is reproduced:

(2)?For the purpose of calculating under sub-sections (1) and (3), the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962, be the aggregate of 

(i)?the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and

(a)?any duty of customs chargeable on that article under section 12 of the Customs Act, 1962, and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include 

(a)?the duty referred to in sub-sections (1), (3) & (5);

(b)?the Safeguard duty referred to in sections 8B & 8C;

(c)?the countervailing duty referred to in section 9; and

(d)?the anti-dumping duty referred to in section 9A  ??????????????(Emphasis supplied)

14.?It is clear from the wordings that any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs has to be added in the value of the goods for calculating the Additional duty. The Additional Duty under the Finance Act is levied and collected as duty of Customs as per the provisions of the Finance Act itself The contention of the appellant that the duty levied under the Finance Act is not to be added in the assessable value for the purpose of computing the Additional Duty of Customs under Section 3 of the Customs Tariff Act, 1975 is not sustainable.

4. The learned Advocate submits that the above decision would not be applicable in their case for the reason that for the earlier period, the same issue was remanded to the Original Authority, who held in Appellants favour, which was challenged by Revenue before Commissioner (Appeals), which is still pending. He also refers to the Boards Circular dt.12.01.2006. We find that the Tribunal had already considered CBE&C Circular dt.12.01.2006 in the case of Hindustan Petroleum Corporation Ltd (supra). We also notice that the earlier remand order has no consequence as the Tribunal in the case of Hindustan Petroleum Corporation Ltd (supra) followed the decision of the Tribunal in the case of Mangalore Refinery and Petrochemicals Ltd - 2006 (205) ELT 753 (Tri.-Bang.), which was upheld by Honble Supreme Court.

5. In view of that, we agree with the decision of the Tribunal in the case of Hindustan Petroleum Corporation Ltd (supra). Accordingly, the impugned order is upheld. The appeal filed by the Appellant is rejected.

(Dictated & Pronounced in Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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