TaxTMI 
TaxTMI 
1985 (12) TMI 234
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....were assessed for export duty and examined by the customs authorities. However, after the cargo was loaded on the vessel, there was a fire in the ship and some of the goods were destroyed. The entire consignment of destroyed and damaged goods was unloaded. The goods sold by public auction to avoid the damaged goods being sold in the market as genuine goods. In the public auction, the goods were cleared by M/s. Lucas Indian Service. Ltd., Madras-2 which is a subsidiary company of the appellant and the goods were scrapped. 3. Later, the appellant company claimed drawback of the duty paid on articles which were originally imported and used in the manufacture of the exported goods. This claim for drawback has been disallowed by all the authorities under the Customs Act as well as by the Union of India on the ground that the goods shipped not having crossed the territorial waters of India cannot be treated as having been exported. The appellant company then filed Writ Petition No. 3727 of 1977 for quashing of these orders. The learned single Judge (Padmanabhan, J.) who dismissed the writ petition took the view that since India is defined in Section 2(27) of the Act as including ....
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....fied in the First Schedule; and (c) such other territories as may be acquired. Thus, according to the learned counsel, when the goods are loaded on the ship in the sea, they have gone beyond the territory of India and must therefore be treated as having been exported. 6. Mr. P. Narasimhan, learned Senior Central Government Standing Counsel, appearing for the respondents has vehemently contended that since India is defined as including the territorial waters of India, the goods cannot be said to have been exported unless they cross the territorial waters. Reliance is placed on the definition of the term "export goods" found in section 2(19) of the Act. The said section defines "export goods" as meaning any goods which are to be taken out of India to a place outside India. It is argued by the learned counsel that when the definition of the term "export goods" referred goods which are to be taken out of India to a place out of India, we must substitute the definition of "India" and must read the definitions of the term "export goods" as meaning those goods which are to be taken beyond the territorial waters of India to a place also beyond the territorial waters of India. 7.....
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...."Entry" in relation to goods means an entry made in a bill of entry, shipping bill or bill of export and includes in the. case of goods imported or to be exported by post, the entry referred to section 82 or the entry made under the regulations made under section 84.' It may be pointed out that the definition of "entry" includes reference to import or export by post, "Import" is also defined in Section 2(23) as meaning, with its grammatical variations and cognate expressions, bringing into India from a place outside India. 10. The relevant statutory provisions with regard to levy of customs duties is to be found in section 12(1) which refers to the levy of customs duty on excisable goods, whether they are imported or exported. Section 12(1) reads as follows :- "S.12(1): Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975, or any other law for the time being in force, on goods imported into, or exported from, India." 11. Section 14 deals with valuation of goods for purposes of assessment. Section 15 deals with the dates for ....
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....oods for exportation." 12. Section 50 laid down a pre-condition before the goods are exported. The exporter of the goods has to make an entry by presenting to the proper officer in the case of goods to be exported by a vessel or aircraft, a shipping bill and in the case of goods which are to be exported by land, a bill of export. For both the kinds of bills, a form has been prescribed. The exporter also while presenting a shipping bill or a bill of export has to make a declaration as to the truth of the contents of the entry. 13. Section 51, in our view, is an important provision. Under the provision, if the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under the Act in respect of the same, he may make an order permitting clearance and loading of the goods for exportation. Once the exporter has complied with the provisions of these sections, so far as he is concerned, whatever is required to be done for the purpose of exportation of the goods has been done by him. As a matter of fact, Section 51 deals with the last stage upto which the export....
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....ack" in relation to any goods manufactured in India and exported, means - (i) the rebate of duty chargeable on any imported materials or excisable materials used in the manufacture of such goods in India." When the definition of "drawback" refers to goods exported, in rule 2(c) the definition of "export" has been given. The definition of "export" reads as follows :- "Export" within its grammatical variations and cognate expressions, means taking out of India to a place outside India and includes loading of provisions or store or equipment for the use on board a vessel or aircraft proceeding to a foreign port". The inclusive part of the definition is not relevant for our purpose. The substantive part of the definition is nothing but a reproduction of the definition found in the Act itself. Nothing therefore turns on these rules in so far as we are concerned with the determination of the question as to whether by loading the goods in the ship after having been cleared under section 51 of the Act, an export has taken place. 16. Normally, undoubtedly, where an Act defines any term used in the body of the Act, one must substitute the definition in places where the te....
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....nnot be said that he had imported or attempted to import any goods contrary to any prohibition imposed by and under the Act or any other law for the time being in force." We are referring to the decision which deals with the concept of import because just as in the case of export of goods outside India and contention is that goods must go beyond the territorial waters, it has been the contention of the Department sometimes, as and when it suits the Department that so far as import is concerned, the import is complete the moment the goods have been brought within the limits of the territorial waters. This question assumes some importance when at the time of entry into territorial waters, the goods are either exempted from customs duty or the customs duty is less and at the point when they cross the customs barrier, either the exemption is taken away or the import duty has been enhanced. In such cases, courts have been called upon to decide as to when import takes place. In the decision referred above this court took the view that goods can be said to have been imported into the country only when they are incorporated in the mixed up with the mass of goods in the country. 18.&e....
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....nch after quoting section 12 of the Act observed as follows :- "What requires to be underlined is a reference to 'goods imported into, or exported from, India'. 'Surely, the expression 'goods exported from India' cannot mean goods exported from the territorial waters of India. It cannot mean goods exported from the territorial waters of India. It cannot mean goods exported from the hypothetical line drawn on the boundary of the Indian territorial waters. It is susceptible to only one interpretation, viz., the goods exported from the 'landmass' of India. Once this view if taken in the context of exportation from India, the expression 'imported into' which forms a part of the expression 'imported into or exported from India cannot carry any other meaning: the expression India must mean landmass of India whether it is in the context of 'exportation from India' or 'importation into India' of goods within the meaning of dutiable goods in the context of section 12(1) of the Act. To construe the expression 'goods exported from India' to mean goods exported from the landmass of India on the one hand, and to interpret the expression following on its heels, the goods imported into India t....
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....nded port of importation, namely, Cochin.". 20. We may with advantage quote a passage from an Australian decision on which the learned Judge of the Kerala High Court has relied. In the Australian decision The Qureen v. Bull and Others [1974 (48) A.L.J.R. 232], the concept of import was elaborately explained as follows :- "However, whether or not the sea within three nautical miles of the coast should be regarded as part of Australia for other purposes, it is in my opinion, clear that goods are not imported simply by bringing them within the three miles limit. It does not conform to ordinary usage to say that goods are imported into a place if they are brought there in the course of transit but with no intention that they should be unloaded there. For example, in ordinary understanding goods would not be thought to have been imported into Australia if they were carried through the waters within three miles of the Australian coast by a ship which did not put into port. Even if goods are brought into port, they are not necessarily imported, for example, a cargo being carried from England to New Zealand is not imported into Australia when the ship on which it is carried puts....
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....t in M. Jamal Company v. Union of India [1985 (21) E.L.T. 369 (Mad.)]. After referring to the decisions cited above and noticing the controversy in the different courts, the Division Bench pointed out that the object of the Act was not to tax the goods, which are passing, through the territorial waters, but only those which got mixed up with the mass of goods in India. The Division Bench then observed in paragraph 19 as follows:- "It is thus abundantly clear that the definition of the word "India' as including the territorial waters under Section 2(27) of the Act, is compatible with S. 12(1) of the Act. The context of S. 12(1) clearly requires that the word 'In India' in this section is not given the meaning it has as per S.2(27) of the Act. It should instead be given the meaning as per the General Clauses Act, viz., the territory of India." This decision specifically deals with the meaning to be given to the word 'India' occurring in Section 12(1) of the Act which is also the question arising in this case before us. We do not see any reason why we should not accept the view taken by the Division Bench especially when it appears to us that when dealing with the question of ex....
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..... The duty in the case of export goods has to be paid before they are exported; in the case of imported goods, they become liable to duty no sooner than they are imported. While in the case of import the duty is attracted if the goods become imported goods, in the case of goods sought to be exported, duty has to be paid when they are still 'export' goods and not after they are exported. This distinction has been made and maintained throughout the Customs Act. An examination of these provisions further fortifies our conclusions that the goods become imported goods no sooner than they are brought from outside the country into the territorial waters of India and the taxable event is not postponed till a bill of entry is filed or till they are sought to be cleared for home consumption." Therefore, even though the Full Bench of the Bombay High Court took a view which runs counter to the decisions which we have earlier cited with reference to the concept of import, even the learned Judges who constituted the Full Bench have clearly taken the view that that anology will not apply to the case of export and that the Act clearly makes a distinction between import of goods and export of go....