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2015 (10) TMI 1774

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..... dated 03.08.2001 issued by Respondent, petitioner is not liable to pay differential duty - Respondent shall pass appropriate orders releasing the bank guarantee for differential duty amount in terms of orders of this Court, within a period of one month – Decision made in the case of Priyanka Overseas (P) Ltd.'s case (supra) [1990 (11) TMI 145 - SUPREME COURT OF INDIA] followed – Decided in favour of the assessee. - OP. No. 25199 of 2001 (Y) - - - Dated:- 1-10-2015 - Anil K Narendran, J. For the Appellant : Sri George Poonthottam, Adv, Sri G L Rawal, Sri Rajesh Rawal For the Respondent : Sri N Nagaresh, ASGI, Sri S Krishnamoorthy, Addl. CGSC, Sri Thomas Mathew Nellimoottil, SC CB EX JUDGMENT The petitioner is a Company incorporated under the Companies Act, 1956 having its Registered Office at Mumbai and Administrative Office at Indore. The petitioner is engaged in the import of Edible Oil like RBD Palmolein, which is a refined, bleached and deodorised form of palm oil, through various Ports in India. 2. The petitioner, in the course of its business, entered into Exts.P1 and P1(a) contracts dated 16.02.2001 and 30.05.2001 respectively with M/s.Aavanti Indust .....

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..... 50 MTs had already been actually removed prior to 03.08.2001 on payment of duty on the declared price, which has been accepted to be the correct value. However, the 2nd respondent refused to release the balance quantity of 1318.150 MTs covered by Ex-Bond Bills of Entry Nos.2915, 3167 and 3199 dated 04.07.2001, 20.07.2001 and 23.07.2001 respectively, the duty in respect of which has already been paid and accepted on 06.07.2001, 23.07.2001 and 24.07.2001 respectively, on the premises of Ext.P6 notification No.36/2001-CUS (NT) dated 03.08.2001 of the 1st respondent, wherein the Central Government in exercise of powers vested in it under sub-section (2) of Section 14 of the Customs Act, fixed the tariff value per MT of Crude Palm Oil, RDB Palm Oil and RDB Palmolein at US$ 337, US$ 351 and US$ 372 respectively. In similar manner, the 2nd respondent refused to release 2540.346 MTs covered by Ex-Bond Bill of Entry No.3407 dated 03.08.2001, the duty in respect of which has already been paid and accepted on 04.08.2001. According to the 2nd respondent, the duty for the left over subject consignment has to be assessed at the tariff rate of US$ 372 per MT, as against the declared price of US$ .....

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..... ing that with effect from 03.08.2001 (incidentally this is the date on which the bill of entry was filed and goods were cleared by the respondent as aforesaid), the tariff value in respect of RBD Palmolein had been raised to USD 372 per metric ton and therefore, the respondent was liable to pay the difference in the tariff which was paid on the basis of earlier notification. The respondent contested the aforesaid demand raised in the show cause notice by filing reply and contending that the notification which was issued under Section 14(2) of the Customs Act, raising the import duty had not come into effect from 03.08.2001. The respondent filed the writ petitions challenging the action of the appellant in determining the duty. 2. Suffice is to state that in these proceedings, the respondent has ultimately succeeded inasmuch as this plea has been accepted and the Division Bench of the High Court has concluded that notification issued under Section 14(2) of the Customs Act cannot be held to have come into force with effect from 03.08.2001. There was some dispute as to whether the notification was published on 03.08.2011 itself or it was published on a later date. However, from .....

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..... ly be the best in another. But reasonable publication of some sort there must be. 7. By the very same order, the Apex Court allowed Civil Appeal Nos.1808-13 of 2013, 4875-76 of 2015 and 9661 of 2014 and the said order reads thus; On the facts of these appeals as well, we find that though the notification may have been published on the date when the goods were cleared, it was not offered for sale by the concerned Board, which event took place much thereafter. Therefore, it was not justified and lawful on the part of the Department to claim the differential amount of duty on the basis of said notification. These appeals are, accordingly, allowed only on this ground and it is not necessary to go into other issues at all. 8. In view of the orders of the Apex Court referred to above, Sri.G.L.Rawal, the learned Senior Counsel appearing for the petitioner submitted that, the petitioner is not pressing the challenge made in this Original Petition against Ext.P6 notification No.36/2001-CUS(NT) dated 03.08.2001 issued by the 1st respondent and the only issue to be decided in this Original Petition is as to whether it was lawful on the part of the 2nd respondent in dema .....

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..... cer, the petitioner released 4437.278 MTs of the subject consignment. The balance quantity to be removed from the bonded warehouse was 1318.150 MTs out of Ex-Bond Bills of Entry Nos.2915, 3167 and 3199 dated 04.07.2001, 20.07.2001 and 23.07.2001 respectively, in respect of which duty has been paid on 06.07.2001, 23.07.2001 and 24.07.2001 respectively. Similarly, a further quantity of 2540.346 MTs of the subject consignment loaded in the vessel 'MTL. SARAH V. 126' against Ext.P1(a) contract, on a negotiated/confirmed price of US$ 248 per MT, was discharged in Cochin Port during the period from 02.06.2001 to 3rd week of July, 2001. Bill of Entry No.1825 for the said consignment was submitted on 23.07.2001, in order to clear the goods for home consumption. Ex-Bond Bill of Entry No.3407 dated 03.08.2001 was submitted on 03.08.2001, which has been assessed and duty of 2,77,60,341/- has been paid by cash on 04.08.2001. 13. However, the 2nd respondent refused to release the balance quantity of 1318.150 MTs covered by Ex-Bond Bills of Entry Nos.2915, 3167 and 3199 dated 04.07.2001, 20.07.2001 and 23.07.2001 respectively, in respect of which duty has been paid on 06.07.2001, 23.0 .....

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..... he date of entry inwards of the vessel or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be. 15. In Commissioner of Customs, Calcutta v. Biecco Lawrie Ltd. [2008 (223) ELT 3 (SC) : 2008 (3) SCC 264] a three-Judge Bench of the Apex Court held that, in the case of goods cleared from warehouse under Section 68, clause (b) of sub-section (1) of Section 15 of the Act provides that the rate of duty and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which the goods are actually removed from the warehouse. The relevant date for determination of rate of duty and tariff valuation is the date on which a Bill of Entry in respect of such goods is presented for home consumption. The subsequent storage of the goods in warehouse was under the provisions of Section 49 of the Act. Therefore, the clearance of warehouse goods for home consumption under Section 68 of the Act will be complete once duty on warehoused goods is paid and out of charge order for home consumption is made by the proper officer i .....

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..... ms or the Deputy Commissioner of Customs, on being satisfied that the goods cannot be cleared within a reasonable time, may permit the storage of such goods in a public warehouse, or in a private warehouse if facilities for deposit in a public warehouse is not available and such goods shall not be deemed to be warehoused goods for the purposes of the Act and, accordingly, the provisions of Chapter IX shall not apply to such goods. Section 68 falls in Chapter IX. Section 15(1)(b) expressly refers to the clearance from the warehouse under Section 68 and the same would not be applicable to the present case. 15. Section 15(1) provides for the rate of duty and tariff valuation applicable to any 'imported goods'. The term 'imported goods' is defined in Section 2(25) of the Act to mean any goods brought into India from a place outside India, but does not include goods, which have been cleared for home consumption. In view of the fact that the imported goods in the present case had been cleared for home consumption on 28th of May, 1998, they ceased to be imported goods within the meaning of the Act and the provisions of Section 15(1)(b)could not be applicable. x .....

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..... thers [1993 Suppl.(3) SCC 453] and Union of India and others v. Apar Private Ltd. and others [1999 (6) SCC 117]. 17. In Priyanka Overseas (P) Ltd. v. Union of India [1991 (51) ELT 185 (SC) : 1991 Supp (1) SCC 102] the Apex Court held that, if the Bills of Entry were filed under Section 68 of the Customs Act and the Customs Officer refused to allow release of the goods on an erroneous assumption, the revised rate of duty would not be applicable and the rate of duty applicable would be the rate on date of filing the Ex-Bond Bill of Entry. Paras 32 and 36 of the judgment read thus; 32. Section 15 of the Act provides for determination of rate of duty on imported goods. The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force in the case of goods cleared from a warehouse under Section 68, the date on which the goods are actually removed (emphasis added) from the warehouse. There can be no manner of doubt that the term 'actual removal' is even more stronger than the term 'physical removal' and the intention of the Legislature in using these words clearly stipulates the actual removal of the goods fro .....

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..... e consumption. Admittedly, the appellant had done its part of legal duty by presenting bills of entry and complying with Section 68(a) of the Act on 28.1.88. But the Customs Officer refused to release the goods on an erroneous assumption that the appellant was liable to pay redemption fine and since it had not paid the said amount, the goods were not liable to be released. The High Court held that the imposition of redemption fine was non est and the petitioner was within its right to claim release of goods without paying any redemption fine, on the day it complied with the formalities under Section 68 of the Act. Section 68(c) of the Act prescribes an official function which was not performed by the Customs authorities due to entertainment of a wrong and illegal notion regarding the payment of redemption fine which resulted into a wrong order by the department. In the circumstances the department cannot be allowed to take advantage of its own wrongful and illegal act,. In moulding relief, this Court has always applied principles of equity in order to do complete justice between the parties. 18. In Priyanka Overseas (P) Ltd.'s case (supra) the Apex Court held further that, .....

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..... ods without payment of any duty. 39. There is no dispute that the remaining goods were also stored in a private warehouse and the appellant had filed the bills of entry and complied with all the required formalities for debonding and clearance of the goods on 28.1.88, therefore the appellant was entitled to an order cancelling the licence of the private warehouse enabling it to remove the goods. Had the Customs authorities passed an order, in accordance with law the same result would have followed as had been done on 17.12.87. The Central Manual published by the Director of Publications, Customs and Central Excise contains directions for determining the actual date of removal of goods from warehouse in terms of Section 15(1)(b) of the Act. The functioning of private warehousing has been elaborated therein. Clause 10 of the Manual prescribes the type of buildings which can be approved as private warehouses under Section 58 of the Act. Para 15 of the Manual provides for purposes of Section 15(1)(b) of the Act, that if the goods are in private warehouse the date of cancellation of the licence of the private warehouse should be taken as the actual removal of the goods for the pu .....

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..... imported goods within the meaning of the Act and the provisions of Section 15(1)(b) could not be applicable. When the full duty stood paid and the Customs Officer had also permitted clearance of the goods, such goods cannot be held to be warehoused goods merely for the reason that the same were allowed to be kept in the warehouse on account of an application made in terms of the provisions of Section 49 of the Act. The Apex Court held further that, where duty on the warehoused goods is paid and out of charge order for home consumption was made by the proper officer in compliance of the provisions of Section 68 of the Act, the goods removed in smaller lots have to be treated as cleared for home consumption. Further, as held by the Apex Court in Priyanka Overseas (P) Ltd.'s case (supra), for purposes of Section 15(1)(b) of the Act, if the goods are in private warehouse the date of cancellation of the licence of the private warehouse should be taken as the actual removal of the goods for the purposes of Section 15(1)(b) of the Act. 21. The contention of the 2nd respondent that Ext.P6 notification came into force with effect from 03.08.2001 and as such, the duty for the left ov .....

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..... dgment of Dhiren Chemical case and knows what was the intention in incorporating para 9 (para 11 in SCC). It must be remembered that law laid down by this Court is law of the land. The law so laid down is binding on all Courts/ Tribunals and bodies. It is clear that circulars of the Board cannot prevail over the law laid down by this Court. However, it was pointed out that during hearing of Dhiren Chemical case because of the circulars of the Board in many cases the Department had granted benefits of exemption notifications. It was submitted that on the interpretation now given by this Court in Dhiren Chemical case the Revenue was likely to reopen cases. Thus para 9 (para 11 in SCC) was incorporated to ensure that in cases where benefits of exemption notification had already been granted, the Revenue would remain bound. The purpose was to see that such cases were not reopened. However, this did not mean that even in cases where the Revenue/ Department had already contended that the benefit of an exemption notification was not available, and the matter was sub judice before a Court or a Tribunal, the Court or Tribunal would also give effect to circulars of the Board in preference to .....

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..... of Ex-Bond Bill of Entry No.3407 dated 03.08.2001 was paid on 04.08.2001, are also not in dispute. The duty in respect of Ex-Bond Bills of Entry Nos.3199 and 3407 dated 23.07.2001 and 03.08.2001 respectively, were paid in cash on 24.07.2001 and 04.08.2001 respectively. As held by the Apex Court in Biecco Lawrie Ltd.'s case (supra), the clearance of warehouse goods for home consumption under Section 68 of the Act will be complete once duty on warehoused goods is paid and 'out of charge' order for home consumption is made by the proper officer in compliance of the provisions of said Section. Further, as held by the Apex Court in Priyanka Overseas (P) Ltd.'s case (supra), if the goods are in private warehouse the date of cancellation of the licence of the private warehouse should be taken as the actual removal of the goods for the purposes of Section 15(1)(b) of the Act. 25. In that view of the matter, the conclusion is irresistible that, if the petitioner had obtained 'out of charge' order for home consumption issued by the proper officer in compliance of Section 68 of the Act and the licence of the private warehouse stood cancelled before 06.08.2001, the .....

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