Customs duty on naval ships not leviable where authorities failed to prove assessable facts and 1958 notification did not apply.

Ships imported for the Indian Navy were treated as not liable to customs duty, additional duty, countervailing duty or auxiliary duty because the taxing authorities failed to establish the basic facts needed to bring the imports within the assessable area. On the materials before the Court, the ships were built outside India and were reasonably inferred to have entered India before 1958. The notification dated 11 October 1958 was therefore inapplicable on the facts found, and no duty was leviable on the ships covered by the writ petitions.

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Issues: Whether customs duty or additional, countervailing, or auxiliary duty was leviable on the ships imported for the Indian Navy.

Analysis: The ships were built outside India and, on the materials before the Court, were reasonably inferred to have been brought into India before 1958. The taxing authorities had not established the basic facts needed to bring the transactions within the assessable area. The notification dated 11 October 1958 was held inapplicable on the facts found.

Conclusion: No duty was leviable on the ships covered by the writ petitions, and the petitioners succeeded.

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