TMI Blog1981 (7) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... iscose staple fibre (29999.8 k gs.) valued about Rs. 3,11,465 from U.K. by Steamer `Clan Macnair' from Middles-bough Port (U.K.) to Madras. The goods were subject to levy of 100 per cent basic import duty under chapter 56 of the First Schedule of Customs Tariff Act, 1975. It was also further subject to Auxiliary duty of 20 per cent leviable under sub-section (1) of Section 32 of Finance Act, 1976 together with additional duty leviable under Section 3 of Customs Tariff Act. 4. By a Notification No. 388 dated 2-8-1976 issued by the Government of India (Ministry of Finance), Department of Revenue and Banking, in exercise of the powers conferred by Section 25(1) of the Customs Act, the Central Government exempted viscose staple fibre when imported into India from the whole of the duty of customs leviable under Chapter 56 of the First Schedule of the Customs Tariff Act. The exemption also applied to the whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975. By an earlier Notification No. 385, dated 23-7-1976, the Central Government exempted viscose staple fibre from the auxiliary duty of Customs leviable thereon under sub-section (1) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Additional duty Rs. 1.50 per Kg. 44,999—70 5% special excise duty on C.V. 2,249—98 10% additional excise duty ... 4,499—77 It is under these circumstances, the present writ petition has come to be filed for the above said relief. 7. The contention of Mr. G. Ramaswami is as follows : The goods in this case entered the territorial waters of India on 7-12-1978. The bill of Entry was prepared on 8-12-1978. It was received by the office of the Assistant Collector of Customs on 13-12-1978. On 13-12-1978, the Assistant Collector of Customs made an endorsement. `P.T.O.K.' On 14-12-1978 an endorsement was made identifying the consignment as synthetic staple fibre of cellulosic origin (viscose). On 16-12-1978 the Assistant Collector of Customs duly made an endorsement `Be assessed on P.T. Home consumption. Drawn on duplicate for test. Goods may be released therefore'. On 18-12-1978 a further endorsement was made `duty forgone'. The notification which governed the levy of duty on the relevant date was the one dated 2-8-1976 which granted exemption to the goods in question. The notification dated 5-1-1979 to the effect that exemption with regard to additional duty under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese reasons, it is prayed that the writ petition may be allowed. 9. Mr. K.N. Balasubramaniam, learned counsel for the department would urge it is incorrect to contend that there is no duty. The interpretation sought to be placed by the petitioner can have the effect of equating the case of exemption to a case of free of duty. The moment the goods are imported there arises a charge. In working out the rates Section 15 comes into play. In Prakash Cotton Mills (P) Ltd. v. B. Sen. AIR 1979 S.C. 675, a question arose as to what is the rate of foreign exchange that was to be applied. The Court held having regard to the terms of Section 15 it is that section that will govern. In W.P. 3422 of 1979 reported in K. Jamal Co. v. Union of India, 1981 E.L.T. 162 (Mad.) this court has taken the view that the rate of duty has to be worked out only in terms of Section 15. The Court in that case has taken the view that `Import' with its grammatical variations and cognate expressions, means bringing into India from a place outside India. `Bringing into India' obviously would mean the clearance of the goods. Therefore, the relevant date is presentation of bill of entry. On the date there was no exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essel entered the territorial waters of India on 7-12-1978, the unloading of the goods could not be done due to cyclonic threats and non-availability of berth in the Madras Port. The vessel was actually berthed on 4-1-1979. On 8-12-1978 the Bill of entry for home consumption under Section 46 of the Customs Act was filed before the Assistant Collector of Customs (Imports), Madras. The Customs authorities made an entry against the column `Customs duty and Additional duty' mentioned in the Bill of entry as `duty free' since Notification No. 388 dated 2-8-1976 was in force at the relevant time. Again, the Assistant Collector of Customs made an endorsement for the release of the goods and `duty foregone was also noted on 29-12-1978 in the Bill of entry. The sample of the consinement was tested and an endorsement identifying the consignment as stapl, fibre was made on 23-12-1978 the Assistant Collector of Customs duly made an endorsement `Be assessed on P.T. home consumption'. Drawn on duplicate for test goods may be released there. There on 29-12-1978 a further endorsement was made `Duty foregone'. The notification dated 5-1-1979 to the effect that exemption with regard to additional du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reveals that the moment the goods are imported into India customs duty can be levied, except as otherwise provided in this Act or any other law for the time being in force. The levy shall be at such rates as may be specified under the Customs Tariff Act, which will hereinafter be referred to as `the Tariff Act'. It is chapter 56 of First Schedule that deals with viscose fibres. This is because Section 2 of the Tariff Act says the rates at which the duty of customs shall be leviable under the Customs Act, 1962, are specified in the First and Second Schedules. But when there is an exemption what is the position is the question that arises for consideration in this case. For this, I have to necessarily refer to Section 15 of the Act. It reads as follows - "15(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force - (a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section ; (b) in the case of goods cleared from a warehouse under Section 68 on the date on which the goods are actually removed from the wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiving of the goods across the Customs frontiers; wide Item No. 41 of List I of the Seventh Schedule to the Constitution. Under Section 3-A of the Sea Customs Act, the Central Government is empowered to define the customs frontiers of India. By a notification dated 6-8-1955 the customs frontier has been denied by the appropriate authority to be `the boundaries of the territory of India including territorial waters.' Therefore, the liability imposed on imported goods will attach the moment the goods cross the frontier, that is even before unloading from the ship. In Halsbury's Laws of England third edition, volume 33, page 138 is stated - "The time of importance of any goods is deemed to be where they are brought by sea, the time when the ship carrying them comes within the limits of a port." The same is the view taken in Shamney v. Sylvania and Laxman LXXVII Bom. L. R. 380. On a careful perusal of the facts of the case, I find it applies on all fours to the present case. There what was imported was glass tubes used in manufacture of fluorescent lamps by the respondent in that case, who were the manufacturers, importers and dealers in electrical goods, including fluorescent lamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty ought not to be confused with quantification of the amount or assessment thereof as provided under the scheme of the Act. Section 15 of the Act specifies the date for determination of rate of duty and tariff valuation of goods imported. In case of goods entered for home consumption under Section 46 the rate of duty applicable to any imported goods shall be the rate in force on the date on which a bill of entry in respect of such goods is presented under that section. The assessment has to be made as provided in Section 17 of the Act. What Sections 15 and 17 provide is to determine the rate at which duty is leviable and to quantify the amount payable by way of duty, but this is entirely different from `chargeability' under the Act. Chargeability arises simply by reason of Section 12(1) of the Act and that takes place only when the goods are imported into India i.e., into the territorial waters of India." 15. The department relies on Prakash Cotton Mills (P) Ltd. v. B. Sen A.I.R. 1979 S.C. 675. That case in my considered view has no application to the question to be determined because there the question was whether the Amendment Ordinance, 1966 which had come into force on July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val was under Section 5(1)(b) in terms of Section 68. On the date of removal of goods the rupee had devalued and the Customs duty in terms of the devalued rupees naturally increased. The importer did not want to pay that higher amount in terms of rupee and, therefore, pleaded that the goods having been already imported into India earlier when they were already chargeable to duty, that rate should prevail and not the subsequent rate. This argument was expressly negatived by the Supreme Court and their Lordships laid down that it was pretty clear that clause (b) of sub-section (1) of Section 5 contemplates the rate of duty and rate of exchange and tariff valuation applicable to any imported goods should be the rate of and valuation in force on the date on which the warehoused goods were actually removed from the warehouse, after the amending Ordinance had come into force, viz., on 7th July 1966, as such the Customs authorities and the Central Government were quite right in taking the view that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse, namely, the amended se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 77 Bom. L.R. 880. Where there is initial chargeability whether as per rates under the Tariff Act or the reduced rate under an exemption Notification under Section 25 of the Customs Act, the Division Bench judgment or its principle does not apply. Only when there is no chargeability at importation or total exemption at importation, the said judgment and its principle would apply. We think that this is the only manner in which that judgment be understood and implemented in its operation when differing facts are presented before the court." 17. This view has been consistently taken by the Bombay High Court can also be seen when reference is made to New Chemi Industries Pvt. Ltd. and another v. Union of India and others - 1981 E.L.T. 920 - "Shri Dhanuka very fairly stated that in view of the decision of the Division Bench of this Court reported in 1981 E.L.T. page 414 in the case of Synthetics and Chemicals Ltd. v. S.C. Courtinho and others, the controversy is concluded as far as this court is concerned. Shri Dhanuka stated that on the date of filing of the petition, a single Judge of this Court had taken the view in Miscellaneous Petition No. 346 of 1970 that the relevant date t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s presented under that section ; (b) in the case of goods cleared from a warehouse under Section 68, on the date on which the goods are actually removed from the warehouse ; (c) in the case of any other goods, on the date of payment of duty : Provided that if a bill of entry has been presented before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards. (2) The provisions of this section shall not apply to baggage and goods imported by post.' 19. But, unfortunately these decisions were not brought to my knowledge and there was no full consideration of the matter as has been done presently. I do not think, I can stick to my old view which was arrived at without reference to these decisions, all of which fully bring about the distinction between the chargeability under Section 12 and the assessment under Section 15. 20. In W.A. No. 537 of 1969 this question did not arise at all since what came up for determination was the date and hour of entry for the purpose of levy of customs duty. As I said above, once the same rate of duty is applicable Section 15 will come ..... X X X X Extracts X X X X X X X X Extracts X X X X
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