TMI Blog1961 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of furnace oil sold by the assessee to ocean-going vessels out of customs bonded stocks. It will be seen accordingly that in three cases the State is the petitioner, and the dispute relates to the assessability of transactions of sale of fuel oil sold to ocean-going vessels out of what is technically known as customs bonded stocks. In these cases, the Tribunal held that the goods had not crossed the customs frontier in the course of their import into the country, that they had not merged with the general mass of goods of the country and were consequently still in the stream of import. In this view, the Tribunal held that the sales were in the course of import and that the State was incompetent to assess such sales to tax. In these cases, a common question arises. The following facts are not in dispute. The assessees imported bunker, fuel or furnace oil and kept it in the customs bonded warehouses. It was from such stocks that deliveries were made to the ocean-going vessels in pursuance of the sale contracts. The contention of the assessees is that so long as the SRINIVASAN, J.- In T.C. No. 151 of 1959, the Deputy Commissioner of Commercial Taxes is the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r warehousing, though the duty leviable has been assessed, it is not immediately payable. Nor is the import duty payable in a case where the owner of the goods clears the goods for shipment to a foreign port. It is in the light of the above provisions, that we have to consider whether the presentation of a bill of entry either for clearance for home consumption or for warehousing and the levy of import duty on the goods completes the course of import or whether so long as the goods remain in the customs bonded warehouses with the duty unpaid, though assessed, the course of import could still be said to continue. What is noticeable in the scheme of the Act is that when the goods are received at a customs port, the authorities of the customs levy the duty payable on the goods. In a case where the clearance is for home consumption, the duty is immediately collected. But in a case where warehousing is sought for, though the duty had been levied on the goods, its collection is postponed till the occurrence of a particular event, viz., clearance for home consumption. Reliance has been placed by the learned counsel for the assessees on certain observations in Stage of Travancore-Coc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd export across customs frontiers and the definition of customs frontiers (Entry 41 of List I) is vested exclusively in the Central Legislature, and detailed provisions have been made in the Indian Sea Customs Act, 1878, for the levy of customs duties by the officers of the Central Government who are stationed along customs frontiers as defined by the Central Government where, after appraising the goods exported or imported, the duties chargeable, if any, are computed and levied, and it is not until this process is completed that the goods can be shipped for transportation or cleared by the consignee or his representatives as the case may be. It would seem, or of the import into, the territory of India does not commence or terminate until the goods cross the customs frontier." The argument that the goods have not crossed the customs frontier and that they cannot be deemed to have done so till the duty has actually been paid and the goods have been cleared for home consumption fails to impress us. The customs frontier is only a notional barrier. When once the goods have been landed at a custom port and have been subjected to tax in the sense that levy of tax has been made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods cannot be taken to indicate that the goods are still beyond the customs frontier. Numerous cases have dealt with the question of sales in the course of export commences, and any sale held thereafter in relation to those goods would be sales in the course of export. The course of export accordingly begins when once the customs authorities have permitted the goods to be exported after levying export duty, if any. On that analogy also, the conclusion is irresistible that when once the goods have been permitted to be imported and the import duty on the goods has been levied by the customs officers, the course of import ends whether or not the goods are immediately cleared for home consumption or are only kept in the bonded warehouses. It would be extremely artificial to hold that solely for the reason that the goods were kept in bonded warehouses after the assessment of the duty on the bill of entry presented by the owner the course of import still continues. Learned counsel for the assessee relied upon Empress Mills v. Municipal Committee, Wardha A.I.R. 1958 S.C. 341. That was a case where the municipality sought to levy terminal tax on goods in transit across the municip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to have been completed. Under section 3-A of the Sea Customs Act, the Central Government has power to define the customs frontier. In exercise of this power a notification was issued on the 1st April, 1950, defining the customs frontiers of India as the geographical frontiers, whether one or more than one, whether sea or land, whether exterior or interior of India; and this geographical frontier would, according to the law, include the territorial water-belt of a width of six miles all round the coast line of India, and upto which limit, the sovereignty of the shore extends. While it is true that technically speaking, an import might be complete when this geographical frontier is crossed, and such a construction is availed of for the purpose of dealing with cases of smuggling, no authority has held that an export does not take place till the ship carrying the goods crosses this geographical frontier. As we have said earlier, numerous cases have held that the course of export commences from the moment the goods cross the customs frontier in the sense that it has been permitted to be exported by the customs officers and have been placed on board the ship. It would be exce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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