Per S.S. Sekhon :

The appellant is a manufacturer of petroleum products and for that purpose imports crude oil. They have been permitted, by the Customs authorities at Mangalore, to operate bounded warehouses in storage tanks for such imported crude oils decanted into these tanks from ships arriving at Port. Ex-bond Bills of Entry for the warehoused crude oil, cleared from such bonded warehouse storage tanks are being filed for home consumption and duties are being paid under the provisions of the Customs Act 1962. Provisional Bills of Entry showing quantity of crude oil received in the bonded storage tanks (also called as shore tanks) were being filed, which were not accepted by the Customs authorities who insisted that Bills of Entry showing the quantity of crude oil as per 'ship's ullage Survey Report' should be filed and that quantity should from the basis for assessment of duty. Therefore, due to such quantity should from the basis for assessment of duty. Therefore, due to such non-acceptance of Bills of Entry showing shore-tank quantities, the appellant filed Bills of Entry showing the quantity as per 'ship's ullage Survey Report' under protest. Based on other documents as provided under Section 18 (1) of the Customs Act the BE's were assessed provisionally. The assessing officer, rejected the appellants request regarding assessment of duty on the basis of quantity as per 'shore-tanks' and insisted on assessment based on quantity as per 'ullage reports'. The Commissioner (Appeals) by a common impugned order in these three appeals after hearing the appellant came to the following finding-

"The Original Authority has followed the guidelines laid down in Public Notice No. 3/94 dated 10.3.94 issued by the Mangalore Custom House which in turn is based on the decision of the Hon'ble Bombay High Court in the case of Shaw Wallace Company Limited Vs. Assistant Commissioner of Customs 1986 (25) ELT 948.

The appellants have in their defence relied on several decisions which have either been differed with or distinguished, in the decision of the Hon'ble Tribunal in the case of Cochin Refineries Limited Vs. Commissioner of Customs, Cochin 1999 (105) ELT 108. In this decision, the Hon'ble Tribunal has discussed extensively about the applicability of various decisions on the question that the determination of quantity for the purpose of action under Section 116 of Customs Act 1962 and the quantity imported for levy of Customs duty under Section 12 of the said act cannot be different. They have observed that "whatever the manner and methodology to be adopted to ascertain correctly the quantity of goods imported, that method has to be the same for the purposes of Section 116 and Section 12". Thus having come to the conclusion that the decisions regarding the manner of determining the quantity imported for the purpose of Section 116 would be equally relevant for the levy of duty under Section 12.

In regard to the method of determining the quantity, the Hon'ble Tribunal,have, in particular cited the following decisions wherein it has been held that the ullage survey report is relevant to determine the quantity of goods imported for the purpose of Section 116.