TMI Blog2006 (9) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of levying customs duty. Any amount collected by the revenue as duty on barge charges shall be refunded forthwith to the assessee with statutonr interest from the date of payment to the date of refund, which must be within three months from today. - 3972 of 2001 - - - Dated:- 29-9-2006 - Ashok Bhan and Markandey Katju, JJ. [Judgment per : Markandey Katju, J.]. - Since common questions of law are involved in all these appeals we are deciding them in a common judgment and for our reference we are citing the facts of the case of Ispat Industries Ltd. (Civil Appeal No. 3972 of 2001). Civil Appeal No. 3972 of 2001 2.This appeal has been filed against the judgment and order dated 7th March 2001 passed by the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as CEGAT), West Regional Bench, Mumbai. 3.Heard learned counsel for the parties and perused the record. 4.The facts of the case are that the appellant is a regular importer of iron ore pellets falling under Chapter Sub-heading No. 2601.12 of the Customs Tariff Act, 1975. The present appeal relates to 14 consignments of iron ore pellets imported between 14-2-1996 to 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mportation', and the assessable value of the cargo should be determined without including the transportation charges of the barges from BFL to Dharamtar jetty. 8.Thereafter, a show cause notice dated 22-4-1998 was issued by the Assistant Commissioner of Customs (Preventive) Alibag Division (Annexure P-4 to the Appeal). In this show cause notice it was stated that duties which were assessed provisionally under Section 18 of the Customs Act, 1962 had been assessed finally and the appellant was requested to pay the duties short paid within 10 days or to explain why an amount of ₹ 78,54,112/- (the barge charges) should not be recovered from the appellant. Similar show cause notice dated 17-7-1998 (Annexure P-5 to the Appeal) was also issued. 9.Thereafter the appellant gave its reply and was also heard personally through its authorized representative, but by the order of the Assistant Commissioner of Customs dated 5-10-1998 (Annexure P-6 to the Appeal) the demand was confirmed. The appellant appealed against the said order which was rejected by the Commissioner of Customs (Appeals), Mumbai vide order dated 10-2-1999. 10.Aggrieved, the appellant filed an appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Section 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50; Section 14(1A) of the Act states as under : Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf. Section 30(1) states as under : The person-in-charge (1) of- a vessel; or an aircraft; or a vehicle, carrying imported goods or any other person as may be specified by the Central Government, by notification in the Official Gazette, in this behalf shall, in the case of a vessel or an aircraft, deliver to the proper officer an import manifest prior to the arrival of the vessel or the aircraft, as the case may be, and in the case of a vehicle, an import report within twelve hours after its arrival in the customs station, in the prescribed form and if the import manifest or the import report or any part thereof, is not delivered to the proper officer within the time specified in this sub-section and if the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form . Section 47(1) states as under : 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 . 13.Apart from the above-mentioned provisions in the Act, it is necessary to mention certain provisions in the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (hereinafter referred to as 'The Rules'). Rule 4(1) (2) state as under : The transaction value of imported goods (1) shall be the price actually paid or payable for the goods when sold for export to India, adjusted in accordance with the provisions of Rule 9 of these rules. (2) The transaction value of imported goods under sub-rule (1) above shall be accepted : Provided that - (a) the sale is in the ordinary course of trade under fully competitive conditions; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1) states as under : (1) Subject to the provisions of Rule 3 of these rules, the value of imported goods shall be the transaction value of similar goods sold for export to India and imported at or about the same time as the goods being valued . Rule 9(2) states as under : For the purpose of sub-section (1) and (2) subsection (1A) of Section 14 of the Customs Act, 1962(52 of 1962) and these rules, the value of the imported goods shall be the value of such goods, for delivery at the time and place of importation and shall include - the cost of transport of the imported(a) goods to the place of importation; loading, unloading and handling charges(b) associated with the delivery of the imported goods at the place of importation; and the cost of insurance(c) : Provided that -- where the cost of transport referred to in clause (a) is not ascertainable, such cost shall be twenty per cent of the free on board value of the goods; the charges referred to in clause (b) shall be one per cent of the free on board value of the goods plus the cost of transport referred to in clause (a) plus the cost of insurance referred to in clause (c); where the cost referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of its import. 15.The view we are taking in this case is in accordance with the three-Judge Bench decision of this Court in M/s. Rajkumar Knitting Mills (P) Ltd. v. Collector of Customs, Bombay - AIR 1998 SC, 2602. In para 7 of the said decision, it was observed thus : The words ordinarily sold or offered for sale do not refer to the contract between the supplier and the importer, but to the prevailing price in the market on the date of importation or exportation 16.The above decision thus clearly held that it is not the actual price mentioned in the contract between the supplier and the importer which has to be seen, but the prevailing price in the market has to be seen. This again lends support to the view we are taking that Section 14 is a deeming provision and we have not to take specific cases for determining the value of the imported goods unless the same is in accordance with Section 14 of the Act. 17.Hence, while determining the value of Section 14, we must never lose sight of the fact that Section 14(1) is a deeming provision which creates a legal fiction. 18.Legal fictions are well-known in law. In the oft-quoted passage of Lord Asquith in Eas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the foreign port to the Indian port. Hence, a further addition to the transport charges under Rule 9(2)(a) of the Customs Valuation Rules, 1988 is in our opinion clearly impermissible. 24.If we read Rule 9(2) of the Rules independently without considering it along with Section 14 of the Act, then of course the submission of the learned counsel for the Revenue could be sustained. However, in our opinion, Rule 9(2) has to be read along with Section 14 and it cannot be read independently. As already stated above, Section 14 creates a legal fiction and we have to see the ordinary value of the imported goods in the course of international trade at the place and time of import. This means that specific cases of import should be ignored. In fact, it is for this reason that Rules 4, 5 and 6 of the Rules have been promulgated. The actual price paid for the goods can only be taken into consideration provided the sale is in the ordinary course of trade under fully competitive conditions and the other provisions of Rule 4 are satisfied. 25.It is well-known that there are sales in which there is under-invoicing or over-invoicing or for some other reasons the sale is not under full comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which would uphold its validity while the other which would invalidate it, the former should be preferred. 30.In this connection we may also refer to the Gunapradhan Axiom of the Mimansa Principles of Interpretation, which is our indigenous system of interpretation (see K.L. Sarkar's Mimansa Rules of Interpretation, Second Edition p. 71). 31.It is deeply regrettable that in our Courts of Law, lawyers quote Maxwell and Craies but nobody refers to the Mimansa Principles of Interpretation. Few people in our country are aware about the great intellectual achievements of our ancestors and the intellectual treasury they have bequeathed us. The Mimansa Principles of Interpretation is part of that intellectual treasury, but it is distressing to note that apart from a reference to these principles in the judgment of Sir John Edge, the then Chief Justice of Allahabad High Court, in Beni Prasad v. Hardai Devi, (1892) ILR 14 All 67 (FB), and in the judgments of one of us (Markandey Katju, J.) while a Judge of Allahabad High Court (which have been annexed to the Second Edition of K.L. Sankar's book), there has been almost no utilization of these principles even in our own coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary to explain this Sutra in some detail. The peculiar quality of the Rigveda and Samaveda is that the mantras belonging to them are read aloud, whereas the mantras in the Yajurveda are read in a low voice. Now the difficulty arose about certain ceremonies, e.g. Agnyadhana, which belong to the Yajurveda but in which verses of the Samaveda are to be recited. Are these Samaveda verses to be recited in a low voice or loud voice ? The answer, as given in the above Sutra, is that they are to be recited in low voice, for although they are Samaveda verses, yet since they are being recited in a Yajurveda ceremony their attribute must be altered to make it in accordance with the Yajurveda. 34.In the Shabar Bhashya translated into English by Dr. Ganga Nath Jha, published in the Gaekwad Oriental Series, the Sutra is read as follows : Where there is a conflict between the use and the substance greater regard should be paid to the use Commenting on Jaimini 3:3:9 Kumarila Bhatta says : The Siddhanta laid down by this Sutra is that in a case where there is one qualification pertaining to the Accessory by itself and another pertaining to it through the Primary, the former qualificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37.In our opinion, it is really not necessary to decide whether the place of importation is the jetty or the BFL. Whether the place of import is deemed to be the BFL or Dharamtar jetty it would make no difference to the conclusion we have arrived at because the cost of transportation of the imported goods has already been included for delivery at the Dharamtar jetty and has already been paid to the seller in the CIF or FOB contract. Hence, a further addition to the transport charges in the form of barge charges for the transportation by barges cannot be said to be contemplated by Section 14 of the Act. 38 Learned counsel for the Revenue has relied upon a decision of this Court in Garden Silk Mills Ltd. v. Union of India - 1999 (13) E.L.T. 358 (S.C.), in which it was observed thus : It was further submitted that in the case of Apar's Private Limited this Court was concerned with Sections 14 and 15 but here we have to construe the word imported occurring in Section 12 and this can only mean that the moment goods have entered the territorial water, the import is complete. We do not agree with the submission. This Court in its opinion in Re. The Bill to Amend Section 20 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waters, the rate of duty was nil but when they were removed from the warehouse, the duty had become leviable. In this context, this Court held that what is material is not the date when the goods entered the territorial waters of India but the date mentioned in Section 15 of the Act. Thus, Apar Industries case (supra) has also nothing to do with the question-which we were dealing with in the present case. 42.In Dhiraj Lai H. Vohra Others v. Union of India Others - 1993 (Supp. 3) SCC 453, the facts were that the appellants' ship arrived on February 20, 1989 at Madras port and was ready to discharge the cargo. It delivered the import manifest under No. 116 on the said date but due to continued strike the cargo could not be handled. On February 27, 1989 the petitioner presented the bill of entry for clearance of goods for home consumption and it was entered at No. 012036 which was received in the appraising section of the group on February 28, 1989. The ship arrived into the port and was berthed on March 2, 1989. The entry inward was granted on March 2, 1989. From March 1, 1989 the rate of excise duty was altered. It was increased to 150 per cent ad valorem plus ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Another v. Union of India and Another - AIR 1989 SC 2054, in para 14 of which it was observed : We do not find it possible to accept this submission. The provisions of S.15 are clear in themselves. The date on which a Bill of Entry is presented under S. 46 is, in the case of goods entered for home consumption, the date relevant for determining the rate of duty and tariff valuation. Where the Bill of Entry is presented before the date of Entry Inwards of the vessel, the Bill of Entry is deemed to have been presented on the date of such Entry Inwards . 48.In our opinion, this case has no relevance in the present case. The facts there were that although the ship in question entered Bombay port and registered itself there but was unable to secure a berth in the port of Bombay at that time. Hence the vessel under pressing circumstances left for Karachi port for unloading other cargo intended for that port. On return to Bombay port, it was asked to pay a higher rate of duty which had been increased in the meantime. It was in that connection that the aforesaid observation was made by the Constitution Bench. Clearly, this decision has nothing to do with the present case, becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the factual situation. In the same judgment this Court held as under : Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgment of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgment. They interpret words of statutes; their words are not to be interpreted as statutes . 54.In London Graving Dock Co. Ltd. v. Horton - 1951 AC 737 at p. 761, Lord Mac Dermot observed : The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 8 of the Act. However, Section 33 permits unloading at a place other than that approved under Section 8 with the permission of the proper officer, and there is no doubt that permission had been obtained under Section 33 under the supervision of the proper officer under Section 34, and the goods were accompanied by a Boat Note under Section 35 of the Customs Act. Hence, unloading of the goods from the mother ship at the BFL was valid, since it was done in accordance with Sections 33 and 34 of the Customs Act. No doubt, the BFL had not been approved as proper place under Section 8(a), but it was a place where the mother ship could anchor. Hence, in our opinion, there is no illegality. 60.In the impugned order dated 7-3-2001 the Tribunal has based its decision on its conclusion that the place of import was the Dharamtar Jetty and not the BFL (vide paragraphs 9 to 18 of The Tribunal's order). Without commenting on the correctness or otherwise of this view, we are of the opinion that whether we treat the place of import as BFL or the Dharamtar jetty it will make no difference to the conclusion we have reached viz. that charges for transport of the goods by barges from BFL to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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