TMI Blog1984 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(1), exempting additional duty in excess of 12 ½ %. 3. On 27-3-1981 two notifications numbered as 75 and 76 were issued. The effect of the first, read with the provisions of the Finance Act, 1981 was to re-impose auxiliary duty up to 5%. And the effect of the second, rescinding the notification dated 29-8-1980, was to re-impose additional duty at 40%. 4. Thus, effective rates of duty on imported aluminium ingots prior to 27-3-1981 and from 27-3-1981 were as follows :- Prior to 27-3-1981 From 27-3-1981 Basic duty Nil Nil Auxiliary duty Nil 5% Additional duty 12.5% 40% 5. The petitioner-company had placed the order for import on 11-3-1981. The vessel carrying the cargo entered the territorial waters of India, near the Cochin Port, on 25-3-1981. It was berthed inside the Cochin Harbour on 26-3-1981. Bill of entry was filed on 28-3-1981. According to the petitioner, the import was complete when the cargo reached the territorial waters of India i.e. before 27-3-1981, and the assessment of duty should have been at the rate then in force. The Department's case is that the relevant date is the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dated of such entry inwards. (2) The provisions of this section shall not apply to baggage and goods imported by post." Section 17 provides for assessment : when imported goods are entered under Section 46, they are to be inspected without undue delay and assessed. Omitting Sections 18 to 24 which are not particularly relevant, Section 25 provides for grant of exemption from duty, in the following terms :- "25. Power to grant exemption from duty. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, except generally, either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. (2) If the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in Section 12 is applicable. When there is an exemption from duty, granted under Section 25, there is no applicable rate, no "chargeability" under Section 12. And when there is no chargeability at the time goods are brought into India, the quantification provisions of Section 15 cannot apply. A distinction has to be maintained between chargeability under Section 12, and quantification under Section 15. When the aluminium ingots in question reached the territorial waters of India on the 25th or 26th of March, 1981 their import was complete, and as an exemption was available at that point of time, the quantification under Section 15 could only be with reference to the reduced or exempted rate then in force. 8. I must confess that the final step in the above process of reasoning is somewhat elusive, though a Division Bench of the Bombay High Court, in Shawhney v. Sylvania (1975 Bom. L.R. 380), had emphasised the distinction between chargeability and quantification, and taken the view. "that there is nothing in any of the provisions to indicate that the chargeability in respect of any levy of customs duty is postponed until a bill of entry is presented." Shawhney's case was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easy enough to understand. It is somewhat like this. The charge is created by Section 12. But the Section also says that the rate of the charge is to be found in the Customs Tariff Act or other law in force. Therefore, if there is no rate prevalent under the tariff Act or any other law on the material date, no question of quantification under Section 15 arises. The material date is the date on which the conveyance enters the territorial waters of India. If at that time there is a total exemption from duty, there is no charge or rate at all, and in such a case, Section 15 will not apply. 10. But the petitioner's contention is unsustainable, even if the above view is applied to the facts on hand. Aluminium ingots were not totally exempt from duty at the time when the vessel reached Cochin on the 25th or 26th of March, 1981. There was a rate applicable at that time. It was 12 ½% in the case of additional duty payable under Section 3 of the Customs Tariff Act. The notification dated 27-3-1981 only increased the rate to 40%. On the authority of Synthetics and Chemicals (1981 E.L.T. 414) and Sundaram Textiles (1983 E.L.T. 909), therefore, duty at 40% was payable in view of the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duties are paid. The heading of Section 12 shows that besides creating the charge, the Section also attempts to identify the class of goods which are dutiable. `India' is defined to include territorial waters for the purpose of imparting the character of "imported goods" to the cargo carried by a conveyance, even before it is berthed in the harbour and starts unloading, so that the prescriptions of Section 30 regarding delivery of import manifest, of Section 31 regarding unloading and of Section 37 regarding inspection, to mention only some of the provisions of Chapter VI, could be effectively enforced. The inclusive definition in Section 2(27) is not designed to pin-point the only point of time at which chargeability under Section 12 could attach to the goods; at the most, the definition specifies only the earliest point of time from which the goods could be treated as dutiable. It does not preclude a charge being imposed at any subsequent point of time, so long as the goods continue to be "imported goods" for the purposes of Section 12. 13. The distinction between the nature of a tax and its measure, or between the taxing event and the machinery for collection, has again been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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