1999 JTR(SC) 734
1999 AIR(SC) 2515 ; 1999 AIR(SCW) 2676 ; 2000 1 BomLR 82 ; 1999 112 ELT 3 ; 1999 5 JT 160 ; 1999 5 JT 161 ; 1999 4 RCR(Civ) 100 ; 1999 4 Scale 313 ; 1999 6 SCC 117 ; 1999 3 SCR 1056 ; 2000 1 UJ 233 ; 1999 KHC 1271 ; 1999 6 Supreme 348
1999(6) Supreme 348
Supreme Court of India
(From Bombay High Court)
B.N. Kirpal, M. Srinivasan & Rajendra Babu, JJ.
Union of India & Ors. -Appellants
versus
Apar Private Ltd. & Ors. -Respondents
Civil Appeal Nos. 1257-1258 of 1987
Decided on 22-7-1999
Counsel for the Parties :
For the Appearing Parties : C.S. Vaidyanathan, Additional Solicitor General, Joseph Vellapally, Sr. Advocate, N.K. Bajpai, Dalip Tandon, K.C. Kaushik, P. Parmeswaran, A. Subba Rao, Ms. Sushma Suri, Sunil Logra, Ms. Monica Sharma, Rajesh Kumar, U.A. Bana, Ms. Arshi Suhail, (Dinesh Kumar Garg, Ms. Radha Rangaswamy, R.K. Agnihotra, Pramod Swarup, Ramesh Chandra Mishra, Ms. Lata Krishnamurthi, S.N. Bhat, Satish Vig, Sanjeev Sachdeva) Advocates, (NP), Rajiv K. Garg, N.D. Garg, K.J. John, A.V. Rangam, A. Ranganadhan, Advocates.
Important point
In the Case of goods which are warehoused relevant date of taxable event would be the date on which goods are actually removed from warehouse u/s 68 of the customs Act and as such even if at the time when the goods entered territorial warters as also on the date when the goods were stored in bonded warehouse goods were exemplted from dutys if subsequently exemption is withdraws, duly has to be said with reference to relevant dali as per Section 15.
Act Referred :CUSTOMS ACT : S.12, S.25, S.46, S.48, S.15
(A) The Customs Act provisions, specifically Sections 12, 25, 46, 48, and 15, govern the determination and levy of customs duty on imported goods. Section 12 defines the point of import, Section 25 addresses duties of customs authorities, Section 46 outlines the procedure for entry for home consumption, Section 48 relates to warehousing provisions, and Section 15 specifies the relevant date for assessing duty. In this case, the applicability of an exemption notification and the correct date for calculating customs duty when goods are stored in a bonded warehouse are examined under these statutory sections.
(B) Key legal principles include that the relevant date for determining customs duty is the date of presentation of the bill of entry under Section 46 or the date of removal from a warehouse under Section 68, not the date of physical entry into territorial waters. The rate of duty is fixed based on the provisions in force on that relevant date, and prior exemptions or notifications do not bind subsequent liability if the duty status changes.
Facts of the case:
Goods imported from a foreign country entered territorial waters and were stored in a bonded warehouse when an exemption notification under the Customs Act was valid, rendering duty nil. Later, upon removal from the warehouse, the notification was rescinded. The respondents argued that no duty should be paid as the taxable event occurred on entry when goods were exempt, while the authorities asserted duty should be assessed on the removal date.
Findings of Court:
The Full Bench of the Bombay High Court was found to have erred in applying Sylvania & Laxmans case. This Court held that the relevant date for determining duty is the date of bill of entry presentation or removal from warehouse, as per Sections 46 and 15, and not the date of entry into territorial waters. The earlier decision was contrary to this Courts subsequent rulings in Bharat Surfactants and Dhiraj Lal cases.
Issues:
Whether the date of entry into territorial waters or the date of removal from a bonded warehouse is the relevant date for assessing customs duty when an exemption notification applicable at entry is rescinded before removal.
Ratio Decidendi:
The date for determining customs duty is the date the bill of entry is presented under Section 46 or the date goods are removed from a warehouse under Section 68, as per Section 15 of the Customs Act. The rate in force on that date applies, and physical entry into territorial waters is not determinative.
Result:
The appeals are allowed, the judgment of the Bombay High Court is set aside, and the writ petitions are dismissed.
(A) The Customs Act provisions, specifically Sections 12, 25, 46, 48, and 15, govern the determination and levy of customs duty on imported goods. Section 12 defines the point of import, Section 25 addresses duties of customs authorities, Section 46 outlines the procedure for entry for home consumption, Section 48 relates to warehousing provisions, and Section 15 specifies the relevant date for assessing duty. In this case, the applicability of an exemption notification and the correct date for calculating customs duty when goods are stored in a bonded warehouse are examined under these statutory sections.
(B) Key legal principles include that the relevant date for determining customs duty is the date of presentation of the bill of entry under Section 46 or the date of removal from a warehouse under Section 68, not the date of physical entry into territorial waters. The rate of duty is fixed based on the provisions in force on that relevant date, and prior exemptions or notifications do not bind subsequent liability if the duty status changes.
Facts of the case:
Goods imported from a foreign country entered territorial waters and were stored in a bonded warehouse when an exemption notification under the Customs Act was valid, rendering duty nil. Later, upon removal from the warehouse, the notification was rescinded. The respondents argued that no duty should be paid as the taxable event occurred on entry when goods were exempt, while the authorities asserted duty should be assessed on the removal date.
Findings of Court:
The Full Bench of the Bombay High Court was found to have erred in applying Sylvania & Laxmans case. This Court held that the relevant date for determining duty is the date of bill of entry presentation or removal from warehouse, as per Sections 46 and 15, and not the date of entry into territorial waters. The earlier decision was contrary to this Courts subsequent rulings in Bharat Surfactants and Dhiraj Lal cases.
Issues:
Whether the date of entry into territorial waters or the date of removal from a bonded warehouse is the relevant date for assessing customs duty when an exemption notification applicable at entry is rescinded before removal.
Ratio Decidendi:
The date for determining customs duty is the date the bill of entry is presented under Section 46 or the date goods are removed from a warehouse under Section 68, as per Section 15 of the Customs Act. The rate in force on that date applies, and physical entry into territorial waters is not determinative.
Result:
The appeals are allowed, the judgment of the Bombay High Court is set aside, and the writ petitions are dismissed.
Order
The judgment of the Full Bench of the Bombay High Court reported in 1985 (22) ELT 6441 is called in question in these appeals by special leave before us. The question which arose for consideration before the Bombay High Court related to the levy of customs duty under the provisions of the Sea Customs Act.
2. The brief facts on which the Bombay High Court proceeded were that when the goods of the respondents entered the territorial waters of India from the foreign country as also on the day they were stored in the bonded warehouse, they were wholly exempt from payment of basic customs duty under a notification issues by the Central Government Act, 1962. When these goods were sought to be removed from the bonded warehouse, the exemption notification had been rescinded and the exemption granted thereunder was withdrawn.
3. The case of the respondents was that on the day when the goods entered the territotial waters, that is the point of time when the taxable event under Section 12 occurred; and as the duty was nil on that day, therefore the question of paying any duty with reference to a subsequent point of time, nemely, when the goods were removed from the warehouse did not arise.
4. The Bombay High Court following its earlier decision in Shawhney v. Sylavania & Laxman2, decided in favour of the respondents and held that as the goods were exempt from payment of tax on the day when they entered the territorial waters no customs duty was payable.
5. In our opinion, this question is no longer resintergra. At least two decisions of this Court, namely, M/s. Bharat Surfactants (Private) Ltd. and Another v. Union of India and Another3, and Dhiraj Lal H. Vohra and Others v. Union of India and Others4, were directly concerned with similar contention that had been raised. Dealing with the same, this Court has in clear terms come to the conclusion that what is relevant is the day on which the bill of entry in respect of goods is presented under Section 46 and in the case of goods which are warehoused the relevant date would be the date on which the goods are actually removed from the warehouse. It is no doubt true that in Bharat Surfactants (supra), this Court did observe that it dis not express any opinion with regard to the soundness of the view taken by the Bombay High Court in Sylvania & Laxman’s case (supra) and in the judgment under appeal but, nevertheless, as we read the said judgment, the conclusion of this Court in Bharat Surfactants was contrary to the view expressed by the Bombay High Court. We do not find that the said decision in Bharat Surfactants can in any way be distinguished from the facts of the present case. Similarly in Dhiraj Lal (supra), the contention raised that the ship had entered the territorial waters on 20th February, 1989 and that was the relevant date for determining the taxability of the imported goods, was rejected. In this connection, it was observed as follows :
“It is clear from a bare reading of these relevant provisions that the due date to calculate the rate of duty applicable to any imported goods shall be the rate and valuation in force, in the case of the goods entered for home consumption under Section 46, is the date on which the bill of entry in respect such goods is presented under that section and in the case of goods cleared from a warehouse under Section 68, the date on which the goods are actually removed from the warehouse. By operation of the proviso if a bill of entry has been presented before the date of entry inwarcs the bill of entry shall be deemed to have been presented “on the date of such entry inwards” but would be subject to the operation of Sections 46 and 31(1) of the Act. Section 46(1) provides that the importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed from and it may be presented under sub-section (3) thereof at any time after delivery of the import manifest. Section 31(1) provides that the master of the vessel shall not permit the unloading of any imported goods until an order has been given by the proper officer “granting entry inwards” to such vessel and no order under sub-section (1) shall be given untill an import mainfest has been delivered or the proper officer is satisfied that there was suvvicient cause for not delivering it. Granting entry inwards on delivery of import manifest and the date of arrival of the vessel into port admittedly are on March 2, 1989 and the Master of the vessel made a declaration in this behalf that they would discharge the cargo on March 2, 1989 therefoer, the relevant date under Section 15(1)(a) is the date on which entry inwaras after delivery of import manifest was granted to discharge the cargo for the purpose of the levy of the customs duty and rate of tariff. The contention, therefoer, that the ship entered Indian territorial waters on February 20, 1989 and was ready to discharge the cargo is not relevant for the purpose of Section 15(1) read with Section 46 and 31 of the Act. The prior entries regarding presentation of the bill of entry for clearance of the goods on February 27, 1989 and their receipt in the appraising section on February 28, 1989 also are irrelevant. The relevant date to fix the rate of customs duty, therefore, is March 2, 1989. The rase which prevailed as on that date would be the duty to which the goods imported are liable to the impost and the goods would be cleared on its payment in accordance with the rate of levy of customs prevailing as on March 2, 1989.”
6. Following the aforesaid two decisions of this Court, we are of the opinion that the judgment under appeal does not lay down the law correctly. Duty has to be paid with reference to the relevant date as per Section 15 of the Customs Act. We, accordingly, allow these appeals and set aside the judgment of the Bombay High Court, the result of which would be tha the writ petitions filed by the respondents in the Bombay High Court would stand dismissed.
No order as to costs.
(C.R.) Appeals allowed.
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