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<h1>Court rules duty liability at time of import, not clearance from bonded warehouse. Exemption notification governs.</h1> The Court ruled in favor of the petitioner Company in a challenge against a notice of demand for countervailing duty on imported wood pulp. The dispute ... Exemption Customs Issues: Challenge to notice of demand for countervailing duty on imported wood pulp; Interpretation of exemption notification; Determination of date of import for customs duty purposes.In this case, the petitioner Company challenged a notice of demand for countervailing duty on imported wood pulp. The Company imported wood pulp between February 1978 and February 1979 and stored it in a bonded warehouse. The dispute arose when the Superintendent of Central Excise claimed countervailing duty on the wood pulp cleared between March 1, 1979, and April 20, 1979, citing the withdrawal of an exemption notification on March 1, 1979. The petitioner argued that the duty liability arises at the time of import, not clearance from the warehouse. The Court agreed, stating that the date of import is when the goods cross the territorial barrier, between February 1978 and February 1979 in this case, under the exemption notification in force at that time. As a result, the demand notice was deemed illegal and quashed.The Court emphasized that the duty liability is determined at the time of import, not clearance from the bonded warehouse. The exemption notification in place at the time of import governs the duty applicability. In this case, the exemption notification exempted the imported wood pulp from countervailing duty until March 1, 1979, which was later rescinded. The Court clarified that the date of import is when the goods enter the territorial jurisdiction, not when they are cleared from the warehouse. Therefore, the demand notice issued after the withdrawal of the exemption was deemed contrary to law and quashed.The judgment made it clear that the date of import for customs duty purposes is crucial in determining duty liability. The Court held that the duty liability arises at the time of import, not at the time of clearance from the bonded warehouse. By interpreting the exemption notification and the relevant legal provisions, the Court established that the imported goods were not subject to countervailing duty based on the exemption in force at the time of import between February 1978 and February 1979. Consequently, the demand notice dated April 20, 1979, was declared illegal and quashed, with the petitioner's bank guarantee for the demanded duty being discharged.
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