2025-VIL-940-CESTAT-AHM-CU
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CUSTOMS CESTAT Cases

Customs - Long delay in finalisation of Provisional Assessment, Ullage Quantity, Transaction Value – Import of Petroleum Crude Oil - Assessment based on the Ship's Ullage Quantity at the port of discharge instead of the Bill of Lading quantity - Whether the finalization of provisional assessments after 16 years is vitiated by unreasonable delay and barred by limitation – HELD - The issue of delay in finalization of provisional assessments has been covered by the decision of the Hon'ble High Court in Bihar Foundry & Castings Ltd v UOI and ors, which held that finalization of provisional assessments after 6 to 9 years is vitiated by unreasonable delay and barred by limitation - In the present case, the delay in finalization of the provisional assessments was 16 years, which is much longer than the reasonable period of 6 months prescribed under the CBIC Manual of Instructions - The decision of the Larger Bench of Tribunal in Shakti Beverages Ltd vs CC, which was relied upon by the Commissioner (Appeals), cannot prevail over the decision of the Hon'ble High Court in Bihar Foundry & Castings Ltd - The Customs (Finalization of Provisional Assessment) Regulations, 2018, which were in force at the time of finalization of the assessments, stipulate a time limit of 2 months from the date of receipt of test report and submission of documents. Accordingly, the finalization of the provisional assessments after such a long delay of 16 years is vitiated by unreasonable delay and barred by limitation – The matter is remanded back to the adjudicating authority to (i) re-examine the issue of delay in finalization of the provisional assessments, and (ii) determine the permissible variation in quantity based on authoritative norms - Appeals are partly allowed as conditional remand - Whether the assessment based on the Ship's Ullage Quantity at the port of discharge is correct, or the assessment should have been based on the Bill of Lading quantity - HELD - The issue of assessment based on the Ship's Ullage Quantity has been covered by the decision of the Hon'ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd v CCE. The CBIC Circulars No. 96/2002-Cus dated 26.07.2002 and No. 34/2016 dated 26.07.2016 also provide that the assessment can be done based on the Ship's Ullage Quantity at the port of discharge. However, the appellant had contended that the variation in quantity found was within the permissible norms, and this aspect needs further examination by the department. The Tribunal remanded the matter back to the adjudicating authority to examine this issue.
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