Rohinton Fali Nariman JUDGMENT
Rohinton Fali Nariman, J.
1. Leave granted in Special Leave Petition (Civil) Nos. 1906-1943 of 2009.
2. In this batch of appeals an interesting question arises on the import of crude oil by the Appellants. We will take the facts contained in Civil Appeal No. 2753 of 2006 for the purpose of deciding these matters.
3. In the said Civil Appeal, during the period 13.01.1996 to 15.03.1998, crude oil was imported by the Appellant by way 144 voyages of vessels, and 71 consignments out of the said 144 voyages were said to have escaped payment of full customs duty. As a result the total duty thus short paid for the 71 consignments out of the 144 voyages worked out to Rs. 6,59,49,685/- (Basic Duty Rs. 6,16,88,210/- and Special Customs Duty Rs. 42,61,475/-) on the total differential assessable value of Rs. 23,71,30,242/- for the period from 13.1.96 to 15.3.98. These figures were arrived at as revenue in its show cause notice dated 7th January, 2000 stated that the quantity of crude oil mentioned in the various bills of lading should be the basis for payment of duty, and not the quantity actually received into the shore tanks in India. This was stated on the basis that since duty was now levied on an ad valorem basis and not on a specific rate, the duty should be paid on the bill of lading quantity based on the ullage obtained when the goods were loaded on the vessel in the country of export. On 14th April, 2000, the Appellant submitted its reply to the show cause notice and stated that it makes no difference as to whether the basis for customs duty is at a specific rate or is ad valorem, inasmuch as under the various judgments of the Tribunal upheld by the Supreme Court, the quantity of goods at the time of import alone is to be looked at. This flows from a reading of the Customs Act, 1962 and the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 and therefore the show cause notice ought to be dropped.
4. On 24th July, 2002, the Commissioner of Customs passed a detailed order in which he held that since the basis of customs duty had changed into an ad valorem regime, "transaction value" would necessarily mean the value at which the goods were to be purchased from the foreign supplier. According to the learned Commissioner, full payment for the goods has to be made by the importer only on the basis of the quantity mentioned in the bill of lading. This being the case, therefore the "transaction value" of the said goods would only be as per the payment made of the amounts stated in the bill of lading and not the quanti........