Warehouse clearance controls customs duty rate for imported goods; later statutory rate applies, not the rate on territorial entry.

For warehoused imported goods, additional duty and auxiliary duty were held chargeable at the rate in force on the date of clearance from the bonded warehouse for home consumption, not the rate prevailing when the goods entered Indian territorial waters. The statutory scheme under the Customs Tariff Act, 1975, the Finance Act, 1978 and the Customs Act, 1962 fixed the relevant rate by reference to actual removal from the warehouse. The argument that applying the later rate created a retrospective levy failed, because no vested right existed to taxation at the earlier rate and the levy operated according to the governing customs machinery.

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Issues: Whether the additional duty of customs and auxiliary duty on imported goods were chargeable at the rate prevailing when the goods entered Indian territorial waters or at the rate prevailing when the goods were cleared from the bonded warehouse.

Analysis: The statutory scheme of the Customs Tariff Act, 1975 and the Finance Act, 1978 applied the Customs Act, 1962 to levy and collection of additional duty and auxiliary duty. For warehoused imported goods, the relevant provisions of the Customs Act fixed the rate of duty by reference to the date of actual removal from the warehouse for home consumption. The contention that collection at the later rate was retrospective failed because no vested right existed to have the goods taxed at the rate prevailing on entry into territorial waters, and the later application of the statutory rate did not create a retrospective levy in the strict sense. The Court relied on the Supreme Court authorities holding that duty on warehoused goods is determined on removal from the warehouse and that additional duty under the Customs Tariff Act remains customs duty and is governed by the Customs Act machinery.

Conclusion: The applicable rate was the rate in force on the date of clearance from the bonded warehouse, not the rate prevailing when the goods entered territorial waters; the petitioners were not entitled to refund or restraint.

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