2002 (3) TMI 49 - SC - Customs

Customs duty appeals dismissed, costs awarded. Court clarifies taxable events for duty assessment.

The appeals were dismissed with costs as the Tribunal upheld the assessment of a special additional duty on customs duty leviable on goods based on ... Special additional duty at four per cent on the customs duty leviable on the goods levied Held that:- The point to note is that for the purposes of customs duty, the taxable event occurs on the date on which the goods are cleared from a bonded warehouse for house consumption. It is that date which is relevant for the purposes of the rate of customs duty and any additional duty thereon. In the present cases, on the dates on which the goods were cleared from the bonded warehouses the special additional duty, introduced on 1st June, 1998, was already in existence and the assessee was correctly made liable to pay the same. The judgment in the case of Polyset Corporation [1999 (10) TMI 66 - SUPREME COURT OF INDIA] deals with the Excise Act. Under the Excise Act, the taxable event occurs when the goods are manufactured, but the collection of the duty may be deferred for administrative convenience. It is, therefore, the date of manufacture which is relevant for the purposes of excise duty and any additional duty thereon. That is what has been held in the case of Polyset Corporation. It has no application to these appeals. The judgment in the case of J.K. Synthetics [1999 (10) TMI 75 - SUPREME COURT OF INDIA] is quite alien to the issue that is before us. Appeal dismissed. Issues involved:1. Assessment of special additional duty on customs duty leviable on goods.2. Conflict of judgments in Kiran Spinning Mills v. Collector of Customs, Collector of Central Excise, Bombay v. Polyset Corporation, and Collector of Central Excise, Jaipur v. J.K. Synthetics.3. Relevant taxable events for customs duty and excise duty.Detailed analysis:1. The judgment deals with the assessment of special additional duty on customs duty leviable on goods. The Assistant Commissioner of Central Excise added a special additional duty at four percent on the customs duty during the assessment of Bills of Entry. The Tribunal upheld this addition based on the judgment in Kiran Spinning Mills v. Collector of Customs. The contention raised by the assessee against this order was that the judgment in Kiran Spinning Mills conflicted with the judgments in Polyset Corporation and J.K. Synthetics.2. In Kiran Spinning Mills, a similar contention was raised regarding the imposition of additional duty under Section 3 of the Tariff Act. The Court held that the taxable event for levy of additional duty is when the goods are removed from the bonded warehouse. The judgment emphasized that the taxable event for customs duty occurs when goods cross the customs barriers, not when they land in India or enter territorial waters. The Court rejected the argument that the additional duty should be based on the time of landing in India.3. The judgment clarified the relevant taxable events for customs duty and excise duty. For customs duty, the taxable event is when goods are cleared from a bonded warehouse for house consumption. In contrast, under the Excise Act, the taxable event is the manufacture of goods, but duty collection may be deferred. The judgment in Polyset Corporation emphasized that the date of manufacture is crucial for excise duty. The judgment in J.K. Synthetics was deemed unrelated to the issues at hand.4. Considering the above analysis, the appeals were dismissed with costs. The judgment highlighted the importance of understanding the specific taxable events for customs duty and excise duty to determine the liability for additional duties accurately.