TaxTMI 
TaxTMI 
1981 (7) TMI 79
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....ad imported under Open General Licence O.G.L. No. 3/78, 142 bales of viscose staple fibre (29999.8 k gs.) valued about Rs. 3,11,465 from U.K. by Steamer `Clan Macnair' from Middles-bough Port (U.K.) to Madras. The goods were subject to levy of 100 per cent basic import duty under chapter 56 of the First Schedule of Customs Tariff Act, 1975. It was also further subject to Auxiliary duty of 20 per cent leviable under sub-section (1) of Section 32 of Finance Act, 1976 together with additional duty leviable under Section 3 of Customs Tariff Act. 4. By a Notification No. 388 dated 2-8-1976 issued by the Government of India (Ministry of Finance), Department of Revenue and Banking, in exercise of the powers conferred by Section 25(1) of the Customs Act, the Central Government exempted viscose staple fibre when imported into India from the whole of the duty of customs leviable under Chapter 56 of the First Schedule of the Customs Tariff Act. The exemption also applied to the whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, 1975. By an earlier Notification No. 385, dated 23-7-1976, the Central Government exempted viscose staple fibre from the auxil....
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.... Basic duty 100% 3,11,465—00 Auxiliary duty 20% 62,293—00 Additional duty Rs. 1.50 per Kg. 44,999—70 5% special excise duty on C.V. 2,249—98 10% additional excise duty ... 4,499—77 It is under these circumstances, the present writ petition has come to be filed for the above said relief. 7. The contention of Mr. G. Ramaswami is as follows : The goods in this case entered the territorial waters of India on 7-12-1978. The bill of Entry was prepared on 8-12-1978. It was received by the office of the Assistant Collector of Customs on 13-12-1978. On 13-12-1978, the Assistant Collector of Customs made an endorsement. `P.T.O.K.' On 14-12-1978 an endorsement was made identifying the consignment as synthetic staple fibre of cellulosic origin (viscose). On 16-12-1978 the Assistant Collector of Customs duly made an endorsement `Be assessed on P.T. Home consumption. Drawn on duplicate for test. Goods may be released therefore'. On 18-12-1978 a further endorsement was made `duty forgone'. The notification w....
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....uestion did not arise. The question that arose was as to what exactly was the rate to be applied having regard to the prevalence of certain notifications. Hence, that decision cannot be applied against the petitioner. For all these reasons, it is prayed that the writ petition may be allowed. 9. Mr. K.N. Balasubramaniam, learned counsel for the department would urge it is incorrect to contend that there is no duty. The interpretation sought to be placed by the petitioner can have the effect of equating the case of exemption to a case of free of duty. The moment the goods are imported there arises a charge. In working out the rates Section 15 comes into play. In Prakash Cotton Mills (P) Ltd. v. B. Sen. AIR 1979 S.C. 675, a question arose as to what is the rate of foreign exchange that was to be applied. The Court held having regard to the terms of Section 15 it is that section that will govern. In W.P. 3422 of 1979 reported in K. Jamal Co. v. Union of India, 1981 E.L.T. 162 (Mad.) this court has taken the view that the rate of duty has to be worked out only in terms of Section 15. The Court in that case has taken the view that `Import' with its grammatical variations and cognate e....
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....ted 23-11-1976, No. 299 dated 26-10-1977, No. 263 dated 10-12-1977, No. 66,dated 18-3-1978. The said ship entered into the territorial waters of India on 7-12-1978 and the vessel was berthed on 4-1-1979 at North Quay. Though the vessel entered the territorial waters of India on 7-12-1978, the unloading of the goods could not be done due to cyclonic threats and non-availability of berth in the Madras Port. The vessel was actually berthed on 4-1-1979. On 8-12-1978 the Bill of entry for home consumption under Section 46 of the Customs Act was filed before the Assistant Collector of Customs (Imports), Madras. The Customs authorities made an entry against the column `Customs duty and Additional duty' mentioned in the Bill of entry as `duty free' since Notification No. 388 dated 2-8-1976 was in force at the relevant time. Again, the Assistant Collector of Customs made an endorsement for the release of the goods and `duty foregone was also noted on 29-12-1978 in the Bill of entry. The sample of the consinement was tested and an endorsement identifying the consignment as stapl, fibre was made on 23-12-1978 the Assistant Collector of Customs duly made an endorsement `Be assessed on P.T. hom....
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....iff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from, India. (2) The provisions of sub-section (1) shall apply in respect of all goods belonging to Government as they apply in respect of goods not belonging to Government." A careful reading of this provision reveals that the moment the goods are imported into India customs duty can be levied, except as otherwise provided in this Act or any other law for the time being in force. The levy shall be at such rates as may be specified under the Customs Tariff Act, which will hereinafter be referred to as `the Tariff Act'. It is chapter 56 of First Schedule that deals with viscose fibres. This is because Section 2 of the Tariff Act says the rates at which the duty of customs shall be leviable under the Customs Act, 1962, are specified in the First and Second Schedules. But when there is an exemption what is the position is the question that arises for consideration in this case. For this, I have to necessarily refer to Section 15 of the Act. It reads as follows - "15(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation i....
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....ia would mean the moment the ship arrives in India. In Collector of Customs v. H.G. Mehra A.I.R. 1964 Mad. 504, this Court took the view after referring to Halsbury's :- "Again liability to duty is attracted the moment the goods are imported. Import implies receiving of the goods across the Customs frontiers; wide Item No. 41 of List I of the Seventh Schedule to the Constitution. Under Section 3-A of the Sea Customs Act, the Central Government is empowered to define the customs frontiers of India. By a notification dated 6-8-1955 the customs frontier has been denied by the appropriate authority to be `the boundaries of the territory of India including territorial waters.' Therefore, the liability imposed on imported goods will attach the moment the goods cross the frontier, that is even before unloading from the ship. In Halsbury's Laws of England third edition, volume 33, page 138 is stated - "The time of importance of any goods is deemed to be where they are brought by sea, the time when the ship carrying them comes within the limits of a port." The same is the view taken in Shamney v. Sylvania and Laxman LXXVII Bom. L. R. 380. On a careful perusal of the facts of the ca....
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.... when the goods are imported into India i.e., when they cross the customs barriers as stated above. That event in this present case took place much prior to March 31, 1967 when the exemption notification was operative. Such chargeability in respect of levy of customs duty ought not to be confused with quantification of the amount or assessment thereof as provided under the scheme of the Act. Section 15 of the Act specifies the date for determination of rate of duty and tariff valuation of goods imported. In case of goods entered for home consumption under Section 46 the rate of duty applicable to any imported goods shall be the rate in force on the date on which a bill of entry in respect of such goods is presented under that section. The assessment has to be made as provided in Section 17 of the Act. What Sections 15 and 17 provide is to determine the rate at which duty is leviable and to quantify the amount payable by way of duty, but this is entirely different from `chargeability' under the Act. Chargeability arises simply by reason of Section 12(1) of the Act and that takes place only when the goods are imported into India i.e., into the territorial waters of India." 15. The....
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....of exchange and the tariff valuation, if any, applicable to any imported goods shall be the rate and valuation in force, and in clause (b) the rate of exchange prevalent on the date of actual removal from the warehouse. The facts before the Supreme Court show that the removal was under Section 5(1)(b) in terms of Section 68. On the date of removal of goods the rupee had devalued and the Customs duty in terms of the devalued rupees naturally increased. The importer did not want to pay that higher amount in terms of rupee and, therefore, pleaded that the goods having been already imported into India earlier when they were already chargeable to duty, that rate should prevail and not the subsequent rate. This argument was expressly negatived by the Supreme Court and their Lordships laid down that it was pretty clear that clause (b) of sub-section (1) of Section 5 contemplates the rate of duty and rate of exchange and tariff valuation applicable to any imported goods should be the rate of and valuation in force on the date on which the warehoused goods were actually removed from the warehouse, after the amending Ordinance had come into force, viz., on 7th July 1966, as such the Customs ....
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....re there is no chargeability on the date of importation, the goods are not liable to duty even though they become so liable, as the exemption may come to an end. That is what precisely was held by the Division Bench in the case of M.S. Shawney v. M/s Sylvania and Laxman Ltd., 77 Bom. L.R. 880. Where there is initial chargeability whether as per rates under the Tariff Act or the reduced rate under an exemption Notification under Section 25 of the Customs Act, the Division Bench judgment or its principle does not apply. Only when there is no chargeability at importation or total exemption at importation, the said judgment and its principle would apply. We think that this is the only manner in which that judgment be understood and implemented in its operation when differing facts are presented before the court." 17. This view has been consistently taken by the Bombay High Court can also be seen when reference is made to New Chemi Industries Pvt. Ltd. and another v. Union of India and others - 1981 E.L.T. 920 - "Shri Dhanuka very fairly stated that in view of the decision of the Division Bench of this Court reported in 1981 E.L.T. page 414 in the case of Synthetics and Chemicals ....