TMI Blog2011 (9) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... APPLICATION No. 25 of 2011 In LETTERS PATENT APPEAL No. 11 of 2011 With CIVIL APPLICATION No. 26 of 2011 In LETTERS PATENT APPEAL No. 12 of 2011 With CIVIL APPLICATION No. 58 of 2011 In LETTERS PATENT APPEAL No. 20 of 2011 With CIVIL APPLICATION No. 60 of 2011 In LETTERS PATENT APPEAL No. 22 of 2011 With LETTERS PATENT APPEAL No. 14 of 2011 In SPECIAL CIVIL APPLICATION No. 2608 of 2007 With LETTERS PATENT APPEAL No. 12 of 2011 In SPECIAL CIVIL APPLICATION No. 1827 of 2007 With LETTERS PATENT APPEAL No. 18 of 2011 In SPECIAL CIVIL APPLICATION No. 2601 of 2007 With CIVIL APPLICATION No. 19 of 2011 In LETTERS PATENT APPEAL No. 7 of 2011 With CIVIL APPLICATION No. 45 of 2011 In LETTERS PATENT APPEAL No. 14 of 2011 With CIVIL APPLICATION No. 21 of 2011 In LETTERS PATENT APPEAL No. 9 of 2011 With CIVIL APPLICATION No. 57 of 2011 In LETTERS PATENT APPEAL No. 19 of 2011 With CIVIL APPLICATION No. 29 of 2011 In LETTERS PATENT APPEAL No. 13 of 2011With CIVIL APPLICATION No. 18 of 2011 In LETTERS PATENT APPEAL No. 6 of 2011 With LETTERS PATENT APPEAL No. 10 of 2011 In SPECIAL CIVIL APPLICATION No. 1703 of 2007 With CIVIL APPLICATION No. 20 of 2011 In LETTERS PATENT APPEAL No. 8 of 2011 With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (ii) Whether 'bill of entry' constitutes 'an instrument' and/or document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded qua entitlement of delivery of goods, within the meaning of Section 2(l) read with Entry 24 of Schedule-I of the Bombay Stamp Act, 1958 as applicable to Gujarat? 5. Facts of one of the leading cases will show the cause of action for which the Respondents-private writ Petitioners preferred writ petitions before this Court. 6. On 30th May, 2006, Tariff Manager, Kandla Port Trust intimated about the procedure to be followed for recovery of stamp duty. On 29th March, 2006, a Circular was issued by the Superintendent of Stamps about amended Stamp Act, drawing attention to Article 24 of Schedule-1. On 21st November, 2006, Deputy Collector, Stamp Duty, addressed a letter to the Port Officer, Jamnagar, intimating about chargeability of instrument to stamp duty when goods are delivered to M/s. Reliance Industries, Gujarat State Fertilizer Corporation and Essar Steel Limited at Sikka Port, Respondents in respective appeals. 7. On 30th December, 2006, a notice was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants-State of Gujarat, the minor ports within the State of Gujarat are controlled and regulated by the Gujarat Maritime Board. There are private ports, but they are regulated by the Gujarat Maritime Board. The authorized officer looks after the importation and insists on presentation of 'bill of entry' import manifest/import report. 12. In case of private jetty, Gujarat Maritime Board authorizes an officer who exercises administrative control. Though it is termed as 'private jetty', its ultimate control and ownership are with the Gujarat Maritime Board. 13. In respect of captive jetty, Gujarat Maritime Board entrusts the same to the authorized officer who can be an officer from the Customs Department. The provisions of Customs Act operate in respect of Gujarat Maritime Board jetties, private jetties and captive jetties. 14. Mr. Shelat would submit that the stand taken by writ Petitioners that the products were directly transferred through pipeline or private jetty to their bonded storage tanks situated outside the premises of the port, they have never been stored in the warehouse or deposited in the wharf, cannot be accepted as the bonded storage tank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded, even though a document itself does not create such right or liability. The intention is to make a distinction between an instrument which itself forms a legal transaction creating a right or liability, and instrument which itself does not form such legal act, but only subsequent record of act in law. 19. Reliance was placed on the decision of Bombay High Court in the case of Li Taka Pharmaceuticals Ltd v. State of Maharashtra and Ors. reported in AIR 1997 Bom.7. In the said case, the Bombay High Court had an occasion to examine the contents of the definition occurring in the Bombay Stamp Act. The Bombay High Court held that it is not the transaction of purchase and sale which is struck at. 20. Reliance was also placed on the decision of the Supreme Court in the case of Purshotam H. Jadye and Ors. v. V.B. Potdar, reported in AIR 1966 SC 856, wherein, the Supreme Court noticed the meaning of 'instrument' and defined the same. Some other case laws were also referred, wherein, definition of the word 'instrument' is widely worded, which will be discussed at appropriate stage. 21. Referring to Article 24, learned Senior Counsel appearing on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an instrument on the presentation of which goods are delivered from the warehouse or from the dock or port. 25. He would further contend that 'bill of lading' and 'bill of entry' are two different instruments, 'bill of lading' is charged for stamp duty under the Indian Stamp Act. It is a document of title used by carriers. It defines a contract of carriage which a carrier undertakes to deliver goods against certain documents, but only provides title of goods. It is a receipt given by a master of receipt acknowledging that the goods specified in the bill have been put on board. 26. He would further contend that warehouse keeper or proper officer will not deliver goods on presentation of the 'bill of lading'. 'Bill of entry' is not a procedural formality. It has to be prepared and lodged to proper officer in prescribed form. Irrespective of whether importer is owner of the goods or not, when he presents the 'bill of entry' for seeking delivery of goods, the said 'bill of entry' is required to be charged with the stamp duty. 'Bill of lading' is not required to be produced at the time of delivery of goods by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such matter. It is submitted that the Respondents deal with crude oil through their captive jetties. The question is whether such duty is leviable on the basis of such 'bill of entry' submitted by an importer and can be said to be a delivery order in respect of the goods, i.e. whether it is an instrument entitling a person to delivery of any goods. Further, according to the learned Sr. Counsel, 'Bill of entry' is not an instrument as defined under Section 2(l) of the Stamp Act and it is not a document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded qua entitlement of delivery of goods. 30. According to the one of the Respondents, namely, Reliance Industries Limited, it imports raw material containing, inter alia, crude oil and also non-liquid cargo for their refinery at Jamnagar. For receiving such raw material, the Reliance Industries Limited has constructed captive jetties at the Port of Sikka. The Respondents also receive imported cargo at other ports in Gujarat. Learned Counsel highlighted the apparatus for discharge of the cargo as described herein below. Captive Jetties: 31. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter as the consignee or the endorsee, as the case may be. 35. Thereby, in all cases of delivery, both at the captive and non-captive jetties, delivery is against 'bill of lading' issued by the carrier and it is marked or endorsed to the consignee/importer. In case of captive jetties, the delivery is taken directly from the carrier, while in case of non-captive jetties, delivery is taken through the Port authorities. But in every case, document entitling a consignee/importer to the delivery is 'bill of lading'. 36. 'Bill of lading' is a document of title signed by the ship owner or by the master or other agent of the ship owner which states that certain specified goods have been shipped on a particular ship, which purports to set out the terms on which such goods have been delivered to and received by the ship. The 'bill of lading' is well-known mercantile document of title, which is transferred in the business world by endorsement, passing to the consignee, good title to the goods covered by such 'bill of lading'. Therefore, according to the Respondents, cargo is delivered to the consignee/importer against the relevant 'bill of lad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2 of the Information Technology Act, 2000. 44. The question whether 'bill of entry' is an 'instrument' within the meaning of Section 2(l) of the Stamp Act, cannot be decided in isolation without noticing the relevant entry of Schedule-I enabling the authorities to charge stamp duty on such instrument. 'Bill of entry', in commercial parlance can be defined to be an instrument or strictly looking to the provisions of Section 2(l), may be an instrument, but if such document does not entitle any person named or his assigns or the holder thereof of delivery of goods lying in any dock or port, in any warehouse in which goods are stored or deposited on rent, then, it cannot be called to be an instrument for the purpose of Entry 24 of the Stamp Act. 45. Delivery order so understood is in the nature of document of title to the goods. 46. Section 2(4) of the Sale of Goods Act defines document of title of goods as follows: document of title of goods includes a bill of lading, dock warrant, warehouse keeper's certificate, wharfinger's certificate, railway receipt, warrant or order for the delivery of goods and any other document used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of the goods. 51. The Supreme Court, in the said case also quoted with approval the following paragraph from the judgment of Bowen, L.J., Sanders Bros. v. Maclean Co, ((1883) 11 QBD 327, at Pg. 341): The law as to the endorsement of bills of lading is as clear as in my opinion the practice of all European merchants is thoroughly understood. A cargo at sea while in the hands of the carrier is necessarily in-capable of physical delivery. During this period of transit and voyage, the bill of lading by the law merchant is universally recognized as its symbol, and the endorsement and delivery of the bill of lading operates as a symbolical delivery o cargo. Property in the goods passes by endorsement and delivery of the bill of lading, whenever it is the intention of the parties that the property should pass just as under similar circumstances the property would pass by an actual delivery of the goods. and for the purpose of passing such property in the goods and complete the title of the endorse to full possession thereof, the bill of lading until complete delivery of the cargo has been made on shore to some one rightfully claiming under it, remains in force as a symbol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the custody of such person as maybe approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transshipped in accordance with the provisions of Chapter VIII. (2) The person having custody of any imported goods in a customs area, whether under the provisions of Sub-section (1) or under any law for the time being in force,-(a) shall keep a record of such goods and send a copy thereof to the proper officer; (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. (3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in Sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under Section 30 for the arrival of the conveyance in which the said goods were carried. 57. Entry of goods on importation is mandatory u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption, which reads as follows: 47. Clearance of goods for home consumption.-(1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. (2) Where the importer fails to pay the import duty under Sub-section(1) within five days, excluding holidays from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest at such rate, not below ten per cent, and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette on such duty till the date of payment of said duty: Provided that where the bill of entry is returned for payment of duty before the commencement of the Customs (Amendment) Act, 1991 and the importer has not paid such duty before such commencement, the date of return of such bill of entry to him shall be deemed to be the date of such commencement for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us matter and it does not create any obligation or liability on the maker thereof and No. civil consequences flow from a mere filing of bill of entry. Upon filing of such bill of entry, the Customs authorities proceed to decide the question about the necessity or otherwise of payment of customs duty and in this fashion, bill of entry merely starts the ball rolling for customs duty. 66. The aforesaid judgment has been affirmed by the Supreme Court in the case of Chowgule Company Pvt. Ltd. v. Union of India, reported in 1987 (28) ELT 39 (SC), though on different grounds, wherein, the Supreme Court has observed that Section 46(1) is a prelude to the levy of duty a first step in that direction. 67. Rajasthan High Court analyzed the scheme of the Customs Act in the case of J.K. Industries Ltd. v. Union of India, reported in (2005) 186 ELT 3 (Raj.), wherein, Division Bench held that the machinery provision for quantification and calculation of duty shall become operative when the bill of entry is presented before the Competent Authority while seeking permission to remove goods from the bonded warehouse under proper authorization or is otherwise deemed to be improperly removed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the holder of the instrument to take delivery. No. person other than the importer named in the Bill of Entry is entitled to seek clearance of the goods from customs and an importer cannot endorse/assign the Bill of Entry and there is No. provision under the Customs Act, 1962 which entitles an assignee of an importer or holder to seek customs clearance based on the Bill of Entry filed by the importer. This would clearly go to show that Bill of Entry is not an instrument contemplated by Entry 24. 72. Entry 24, as it stood prior to the amendment i.e. up to 31st March, 2006 is as follows Delivery order in respect of goods, that is to say, any instrument entitling any person therein named or his assigns or the holder thereof, to the delivery of any goods lying in any dock or port, in any warehouse in which goods are stored, or deposited on rent or hire, or upon any wharf, such instrument being signed by or on behalf of the owner of such goods upon the sale or transfer of the property therein, (when such goods exceed in value one hundred rupees). Post amendment, with effect from 1.4.2006, Entry 24 is as follows: Delivery order in respect of goods, that is to say, any inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of smuggling both in and out of the country. The Act aims to sternly and expeditiously deal with smuggled goods, and curb the dents on the revenue thus caused. In order to deal with the menace of smuggling, the authorities are enabled to detect conduct search and seizure, and if necessary, confiscate such smuggled goods, within the territory of India. Such is the finding of the Supreme Court in the case of Commissioner of Customs v. M. Ambalal Company (supra). The 'bill of entry' signifying itself is an order of assessment has also been held by the Supreme Court in the case of Escorts Limited v. Union of India (supra) and thus, it can be held that it is not an order of delivery, therefore, it cannot be held that 'bill of entry' is an instrument entitling a person named therein or assigns or holder thereof to get delivery of any goods lying in any dock or port or in any warehouse. It is one of the documents, which is required to be produced before the Customs authorities for clearance of goods for home consumption under Section 47 of the Customs Act. For the purpose of clearance, entry of goods of importation is required under Section 46 enabling the importer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, the document must be issued by the bailor and the document must contain instructions to the bailee. In the case of bill of lading, it is not a delivery order.... The aforesaid finding is not based on the proper appreciation of law nor is based on the facts of the case. 81. It is not necessary that in all cases, delivery order requires instructions by the bailor to the bailee to deliver the goods bailed to the person named in the delivery order. A 'bill of lading' is also an order relating to delivery of goods, which will be evident from Regulation 16 of the Gujarat Maritime Board (Landing and Wharfage) Regulations, 1956. 82. The Supreme Court, in the case of J.V. Gokal Company (Private) Ltd.(supra) has held that 'bill of lading is a writing signed on behalf of the owner of the ship in which goods are embarked acknowledging the receipt of the goods and undertaking to deliver them at the end of the voyage subject to such conditions as may be mentioned in the bill of lading. Therefore, it will be clear that 'bill of lading' is a delivery order. Finding of the learned Single Judge that 'bill of lading' is not a delivery order being erroneou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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