1988 (4) TMI 49 - SC - Customs

Court affirms export completion beyond territorial waters under Customs Act 1962

COLLECTOR OF CUSTOMS, CALCUTTA Versus SUN INDUSTRIES

The court upheld the Customs Excise and Gold (Control) Appellate Tribunal's decision, ruling that the goods were exported under Section 75 of the Customs ... Whether under the scheme of Section 75, export having been completed, the respondent was entitled to the benefit of the drawback scheme? Held that:- The expression 'place' will depend for its connotation on the context in which it is used. In clause of charter party requiring charterer to procure safe 'place' for discharge of cargo, quoted word meant spot selected to drop anchor plus area over which tanker might swing to tide and charter's duty was not fulfilled merely be selecting area containing both safe and unsafe berths. The word 'place' as used in a statute relating to searching for stolen goods in any store, shop, warehouse, or other building or place in a town, includes a steam-boat or vessel moored at the wharf. In that view of the matter, there was export of the goods in terms of Section 75 of the Act. The fact that the ship was brought back to India because of the damages in the ship does not, in our opinion, affect the position. Tribunal was right in the view it took and the respondent was entitled to the benefit of Section 75 of the Act. Appeal dismissed. Issues:1. Interpretation of Section 75 of the Customs Act, 1962 regarding drawback on exported goods.2. Determination of 'export' under Section 2(18) of the Act.3. Assessment of whether goods were exported to a place outside India.4. Consideration of the completion of export despite the ship returning due to engine trouble.Analysis:The case involved an appeal under Section 130-E(b) of the Customs Act, 1962, challenging the Customs Excise and Gold (Control) Appellate Tribunal's order allowing the respondent's appeal for drawback on goods exported under Section 75 of the Act. The respondent had shipped plywood panels for tea chests for export to Colombo but the ship ran aground in Indian territorial waters due to engine trouble. The issue was whether the goods were deemed exported despite the ship's return to India.The Tribunal found that the title to the goods had passed to the purchaser upon loading, and the ship had passed beyond India's territorial waters before the engine trouble. It concluded that the export was completed when the ship left territorial waters, entitling the respondent to drawback under Section 75.The appellant argued that export under Section 2(18) required delivery of goods to a place outside India. However, the court held that reaching the high seas beyond territorial waters constituted export. The court emphasized that the goods were taken to a place outside India when they reached the high seas, and the title had passed to the purchasers.The court interpreted the term 'place' in the context of international trade, stating that the high seas beyond territorial waters qualified as a place outside India. It referenced legal interpretations of 'place' in different contexts to support its conclusion that export was completed when the ship left territorial waters.Ultimately, the court upheld the Tribunal's decision, ruling that the goods were exported under Section 75 despite the ship's return due to engine trouble. It held that the completion of export was not affected by the ship's subsequent journey back to India.In conclusion, the court rejected the appeal, affirming the respondent's entitlement to the benefit of Section 75 of the Act. The judgment clarified the interpretation of export under the Customs Act and the completion of export despite unforeseen circumstances like engine trouble.