Circular No. 06/2006
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
12th January, 2006
Sub: – Assessment of Bulk Liquid Cargo – Ship Ullage Report vs. Shore Tank receipt – ref. Circular No. 96/2002-Customs, dated 27.12.2002.
Attention is invited to the Board’s Circular No. 96/2002-Customs, dated 27.12.2002 on the above mentioned subject, wherein, it was conveyed that, in the case of bulk liquid cargo imports, whether for home consumption or warehousing, the shore tank receipt quantity should be taken as the basis for levy of customs duty.
2. A doubt has arisen in cases where customs duty is chargeable on ad-valorem basis, whether there would be any requirement for determination of the quantity of the goods as the basis for levy of customs duty would be the transaction value, i.e., invoice price and not the quantity.
3. The above issue has been under consideration for a long time and a number of assessments are pending at field level because of divergent views. The above issue was discussed in the Conference on “Customs Valuation and Customs Procedures” held on 21st and 22nd August 2003 and also in the Chief Commissioner’s conference on Customs Valuation held on 1st October 2005 at Mumbai. The conference was of the view that the assessment of bulk liquid cargo should be based on invoice price, which is the price paid or payable for the imported goods, i.e., transaction value, irrespective of quantity ascertained through shore tank measurement or any other manner. Wherever the duty is leviable at specific rate, quantity determined during the shore tank measurement should be accepted.
4. The matter has been considered by the Board and it has been decided that, in all cases where customs duty is leviable on ad-valorem basis, the assessment of bulk liquid cargo should be based on invoice price, which is the price paid or payable for the imported goods, i.e., transaction value, irrespective of quantity ascertained through shore tank measurement or any other manner. Further, in respect of delivery at more than one port, the value should be apportioned based on the quantity intended to be discharged at the relevant ports. However, wherever the customs duty is leviable at specific rate, the determination of quantity would be relevant for levy of customs duty. In this regard, the contents of para 7 of the Circular no. 96/2002, dated 27th December 2002 may be referred to only in respect of cases where the Customs duty is leviable at specific rate. All pending provisional assessment should be finalized accordingly.
5. Circular No.96/2002-Customs, dated 27th December 2002 stands amended to the extent as above.