1981 (7) TMI 79 - HC - Customs

Summary

Issues Involved:
1. Determination of the applicable customs duty rate based on the date of entry into territorial waters versus the date of presentation of the Bill of Entry.
2. Validity and applicability of exemption notifications.
3. Jurisdiction and procedural compliance concerning warehousing requests under Section 49 of the Customs Act.
4. Interpretation of Sections 12 and 15 of the Customs Act regarding chargeability and assessment of duty.

Detailed Analysis:

1. Determination of Applicable Customs Duty Rate:
The primary issue revolves around whether the customs duty should be determined based on the date the goods entered the territorial waters of India or the date of presentation of the Bill of Entry. The petitioner argued that the goods entered the territorial waters on 7-12-1978, when Notification No. 66 exempting viscose staple fibre from customs duty was in force. The Bill of Entry was prepared on 8-12-1978 and received by the Assistant Collector on 13-12-1978, during the validity of the exemption notification.

The court referred to Section 12 of the Customs Act, which states that duties of customs shall be levied on goods imported into India. Section 15(1) specifies that the rate of duty applicable shall be the rate in force on the date of presentation of the Bill of Entry. However, the court concluded that if goods are exempt from duty on the date they enter the territorial waters, no duty can be levied, and Section 15 would not apply.

2. Validity and Applicability of Exemption Notifications:
The petitioner relied on multiple exemption notifications, particularly Notification No. 66 dated 18-3-1978, which was valid until 31-12-1978. The court noted that the exemption was extended through various notifications and was in force when the goods entered the territorial waters. The court held that the exemption notifications valid on the date of entry into territorial waters should apply, and subsequent notifications imposing duty would not affect the goods already in transit.

3. Jurisdiction and Procedural Compliance Concerning Warehousing Requests:
The petitioner requested to warehouse the goods under Section 49 of the Customs Act to avoid demurrage and wharfage, which was refused by the Assistant Collector. The court found this refusal to be without jurisdiction and emphasized that procedural delays should not affect the substantive right to exemption from duty.

4. Interpretation of Sections 12 and 15 of the Customs Act:
The court distinguished between chargeability under Section 12 and assessment under Section 15. It clarified that chargeability arises when goods are imported into India, which includes entry into territorial waters. If goods are exempt from duty at the time of importation, Section 15's provisions for determining the rate of duty based on the Bill of Entry presentation date do not apply. The court cited previous rulings, including Shawney v. Sylvania and Laxman and Synthetics and Chemicals Ltd. v. B.C. Coutinho, to support this interpretation.

Conclusion:
The court allowed the writ petitions, holding that the goods were exempt from customs duty as per the notification in force when they entered the territorial waters. The rule nisi was made absolute, and there was no order as to costs. This judgment underscores the importance of the date of entry into territorial waters in determining customs duty liability and reinforces the distinction between chargeability and assessment under the Customs Act.