Importation completes on entry into territorial waters, so a later customs notification cannot revive duty liability.

Goods are treated as imported into India when they enter territorial waters, because the Customs Act defines India to include those waters and defines import as bringing goods into India from outside India. The taxable event under Section 12 therefore arises at entry into territorial waters; later valuation and rate provisions govern assessment and quantification, but do not defer chargeability. Where a full exemption is in force on the date of importation, the levy is removed altogether, and withdrawal of that exemption before clearance does not revive customs duty liability. A later notification could not, on this construction, fasten duty on the goods.

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Issues: Whether importation of the goods was complete when they entered the territorial waters of India, so that the customs duty imposed by the later notification could not be levied on them.

Analysis: The relevant provisions define "India" under the Customs Act as including territorial waters, and define "import" as bringing goods into India from a place outside India. On that construction, goods become imported goods as soon as they enter territorial waters and the taxable event under Section 12 occurs at that point. Sections 14 and 15 deal with valuation and the rate of duty, which are matters of assessment and quantification that may occur later; they do not postpone chargeability. A total exemption in force on the date of importation removes the levy itself, and withdrawal of the exemption before clearance does not revive duty liability.

Conclusion: The importation was complete when the goods entered the territorial waters of India, and the later notification could not fasten customs duty on them.

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