Warehoused goods and customs exemption: duty is determined on clearance for home consumption, not merely on arrival.

Warehoused imported goods are treated as fully imported for customs purposes only when cleared for home consumption, not merely on arrival at the port. On that construction of the Customs Act, 1962, the applicable duty and exemption position is determined with reference to the date of clearance under section 15(1)(b), read with the warehousing and clearance scheme, including sections 2(23), 68, 47 and 111(d). The result is that exemption notifications issued after arrival but before clearance can apply to goods still in a bonded warehouse, because importation is complete only at clearance. This interpretation preserves the operation of section 15(1)(b) and avoids redundancy.

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Issues: Whether warehoused goods were entitled to the benefit of exemption notifications issued after their arrival but before their clearance for home consumption, and whether the relevant duty was to be determined with reference to the date of clearance under the Customs Act, 1962.

Analysis: Duty under section 12(1) of the Customs Act, 1962 is levied on goods imported into India, but the expression "imported into India" must be read with the scheme of the Act, including the definition of import in section 2(23), the warehousing provisions in section 68, the clearance provisions in sections 47 and 15(1)(b), and the prohibition provision in section 111(d). Goods kept in a bonded warehouse are not fully imported for customs purposes until they are cleared for home consumption and become capable of being used for the purpose of import. On that construction, the relevant rate and exemption position is governed by the date on which the warehoused goods are cleared, not merely the date on which they first entered territorial waters or arrived at port. That reading also avoids rendering section 15(1)(b) redundant.

Conclusion: The exemption notifications applied to the warehoused goods, and the petitioners were entitled to clearance on that basis.

Final Conclusion: The applications succeeded and the customs authorities were directed to extend the benefit of the exemption notifications to the petitioners.

Ratio Decidendi: For warehoused imported goods, the process of importation is treated as complete only on clearance for home consumption, and the duty applicable is the duty in force on that date under section 15(1)(b) of the Customs Act, 1962.

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