TMI Blog1988 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... before the said notification came Into force, the question is whether the goods have been imported prior to 4th February, 1987 i.e. before the said Notification No. 40/87, dated 4thFebruary, 1987 came into effect imposing a duty ad valorem. According to the petitioner notification came into force after the goods had entered into the territorial waters of India on 27th January, 1987 and the goods were unloaded on 29th January, 1987 and he presented the bill of entry on 3rd February, 1987. 4. It is the contention of the respondents that for the purpose of fixing the rate of duty, the date of importation is not relevant. What is relevant is as provided under Section 15 of the Customs Act, 1962. Section 15 fixes (i) the date and (ii) the rate from and at which the duty is to be imposed: From Section 15. It is the date of importation is not mentioned therein. In the present case, the relevant date Is the date when the of Entry has been filed for home consumption with the Department. The petitioner presented the Bill of Entry on 5th February, 1987 when the same was assessed to duty on the said date on the basis of the said Notification No. 40/87, dated 4th February, 1987. It is, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'goods' imported into India occurring in Section 12 mean ? The chargeability of goods to Customs duty arises when goods are imported and only when such import is 'into India'. Both the words 'import' and 'India' have been defined under the Customs Act. The word 'import' is defined in Section 2(2) of the Customs Act asunder;,,, "import with its grammatical variations and cognate expression mean bringing to India from a place outside India". . 8. The word "India" itself may mean geographically defined land mass or extend to either "territorial waters" or "continental shelf" or "exclusiv economic zone" or "other maritime zones". Each of these expressions extends the territory of India beyond the land mass into the sea to varying extents. In order to give certainty to what is meant by "India" in the context of the Customs Act and chargeability of goods to Customs duty, the Parliament thought it expedient to also define "India" in Section 2(27) as under : "India includes the territorial waters of India". 9. The expression "Imported goods" Is also defined in Section 2(25) in the following words : "Imported goods" means any goods brought into India from a place outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the word "India" occurs in the Customs Act that meaning should be given or so understood, is enjoined by Section 2 using the expression "unless the context otherwise required". Hence for the purpose of the Customs Act ordinarily "India" must be understood as including its territorial waters. There must be something in the context of Section 12 or other provisions of the Customs Act read with Section 12 which must compel us to give the word "India" a different meaning and as not "Including the territorial waters of India". We may, therefore, now examine the provisions of the Customs Act to see if there Is anything therein which requires us to hold that the words "import" or "import Into India'' do not mean bringing goods from outside Into territorial waters of India but that it would mean bringing them to the land mass of India. In other words, could it be said that there is no "import" of goods into India when they enter the territorial waters-out these would be import only after they are unloaded on the land mass of India." 11. The Full Bench thus held that for the purpose of Customs Act ordinarily India must be understood as Including the territorial waters. 12. Then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported goods unloaded In Customs area shall remain in the custody of such person as may be approved by the Collector of Customs until they are cleared for home consumption or are warehoused or are transshipped In accordance with the provisions of Chapter VII. Only the proper officer may dear the Imported goods for home consumption after he is satisfied that they are not prohibited goods and the importer has paid the import duty, if any assessed thereon. Irrespective of whether the goods are dutiable or not the goods may be cleared only after an order permitting clearance of goods for home consumption is made. If the Assistant Collector of Customs is satisfied that the goods cannot be so cleared within a reasonable time, he may permit the storage of imported goods in a warehouse pending clearance. Goods referred to in Section 14 are goods on which duty of Customs Is chargeable by reference to their value. It would be clear that Section 14 by Itself does not lay down when or what goods are chargeable to Customs duty. It only deals with valuation of the goods imported which are chargeable to Customs duty. If they are chargeable to Customs duty and are chargeable by reference to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izance of the fact and having regard to the nature of the levy of Customs duty that the word "levied" occurring In Section 1 2 has several connotations appears to have advisedly specified under different provisions of the enactment the different stages i.e. the stage when goods become chargeable to duty, the stage when the goods have to be valued and the stage when the duty has to be quantified. Under the Customs Act, chargeability is under Section 12, valuation of goods under Section 14 and the rate at which the duty should be assessed is under Section 15. As discussed above, these different events may occur at different points of time, but unless the goods are chargeable to duty and the taxable event occurs, the question of valuation of goods and quantification of duty payable at any particular rate obviously cannot arise. The taxable event has to occur at some particular point of time at different and cannot in respect of the goods imported at one and the same time occur at different points of time for some when they were unloaded, for some on the different dates as and when they are cleared from the warehouse. That would create confusion and it would be impossible to ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which goods imported. into India cannot be taken beyond the Customs barrier. In our view, in the context of Section 12 Import into India; which includes Its territorial waters, must mean that for the purpose of chargeability under Section 12, taxable event occurs when the goods enter the territorial waters." 17. After referring to the decisions of the Supreme Court in R.C. Jail v. Union of India reported, in AIR 1962 S,C. 128; Shinde Brothers v. Deputy. Commissioner, Ralchur reported in AIR 1967 S.C. 1J512 and Union of India v. Bombay Tyre International Ltd. reported in AIR 1984 S.C. 420 = 1983 ELT 1896 (S.C.), the Full Bench held as follows :- "In our view, the above decisions also make it dear that the taxable event may occur at one time and the duty chargeable upon that event occurring may be quantified and collected at a later date but there Is nothing In the Customs Act which indicates that the chargeability itself is postponed to a later date. What is postponed is quantification and collection and not chargeability. These decisions though rendered In the context of levy of excise duty tend support to the view we have taken, namely, while import duty is on the act of impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at what point of time anterior to the actual clearance do the goods become imported goods? Is it when they enter the goods are unloaded on the land mass ' of India? If it could be any of these'; then, in our view, the definition of the word 'India" for the purpose of the Customs Act Trust clinch the issue. After all, words and expressions are defined in a statute to make the Intention of the legislature explicit and precise where such words and expressions are susceptible of several meanings. The combined effect of the definitions of the words "import" and "India" under Sections 2(23) and 2(27) of the Customs Act, to our mind, is that import can be said to take place as soon as goods are In-ought into the territorial waters of India. The taxable event occurs, when, as laid down by Section 12, goods are imported into India and since "India" includes its territorial waters, the taxable event occurs no sooner than the goods enter the territorial waters of India and does not postpone till they are actually off loaded on the land mass or if the goods are valued under. Section 14 or till date for determining the rate at which the Customs duty should be levied under Section 15 arrives. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anshipment; It, as contended for the Customs authorities, the goods become imported goods only when they are sought to be cleared for home consumption or placed in such a position as to be mixed with the goods on the land mass, all the provisions referred to above would be rendered wholly redundant. They would not be Imported goods and would not be liable to Customs duty until they are actually cleared or sought to be cleared after being lodged in the warehouse. These provisions, in our view, make the legislature intent abundantly dear that the goods become imported goods no sooner than they enter the territorial waters of India, which provisions would have been wholly unnecessary if goods become liable to Customs duty only at the time of clearance." "What follows from the above discussion is that when goods from a place outside India are brought to India as defined under Section 2(27) of the Customs Act, that is, into the territorial waters of India, they become "imported goods". They continue to be Imported goods until cleared for home consumption. The taxable event occurs upon the goods entering the territorial waters of India. If at that point of time, the imported goods, are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is in force on the date when goods are imported, that is, when the goods enter territorial waters of India, as those goods continue to be chargeable to duty and the importer is only exempted from paying It, If any the time they are removed for home consumption that notification is withdrawn, duty would be payable at the time of removal of goods as laid down in Sections 14 and 15 read with Section 12. If the goods are not chargeable to Customs duty in view of any of the provisions of the Customs Act or the provisions of any other law, then neither their valuation under Section 14 nor calculate on of the duty payable at the rates as mentioned in Section 15 of the Customs Act would be required. Same levy of Customs duty Is issued under sub-section (1) of Section 25 of the Act. The observation in the order of reference that chargeability of the goods to Customs duty arises on account of the goods being listed in the Schedule ignores the opening words "Except as otherwise provided in this Act or any there law for the time being in force" occurring in Section 12. We are unable to agree with that observation. If on account of exemption granted under no duties of Customs can be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the time these goods came to be cleared for home consumption." 22. On behalf of the Revenue, story Reliance was placed in Prakash Cotton Mils (P) Ltd. v. J. Sen, reported in AIR 1979 S.C. 675. 23. This decision was also considered by the Full Bench and the Full Bench observed as follows: "It must be noticed that this was not a case of goods which were totally exempt from Customs duty. They were chargeable to Customs duty under Section 12 and only the rate of duty at which they were chargeable was in question. Are they to be charged at the rate prevalent on the date they were imported or at the rate in force when they were sought to be removed from the warehouse ? As discussed above, on the day the goods were imported, that is, when they entered the territorial waters of India, the taxable event occurred and if on that day the goods were wholly exempt from duty. the question of calculating the rate does not arise at all and, therefore, the further question whether the rate prevalent on the date of importation, i.e. when they entered the territorial waters or when they are sought to be removed from the warehouse for home consumption also does not arise. There is nothing in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
