1981 (10) TMI 178 - CGOVT - Customs

Issues Involved:

1. Determination of the crucial date for the levy of customs duty on imported goods.
2. Applicability of Section 15(1) of the Customs Act, 1962.
3. Interpretation of the term 'import' under Section 2(23) of the Customs Act, 1962.
4. Relevance of the Supreme Court decision in M/s. Prakash Cotton Mills Pvt. Ltd. v. B. Sen & others.
5. Applicability of the exemption Notification No. 227-Cus., dated 2-8-1976.
6. Interpretation of the Division Bench judgment in M/s. Sylvania & Laxman v. M.M. Singh Shoure.

Issue-wise Detailed Analysis:

1. Determination of the crucial date for the levy of customs duty on imported goods:

The central issue is whether the date for the levy of customs duty should be the date the goods enter the territorial waters of India or the date determined under Section 15(1) of the Customs Act, 1962. The petitioners argued that the duty should be based on the date the goods entered the territorial waters (21-8-1977), while the authorities assessed the duty based on the date of entry inwards (15-9-1977).

2. Applicability of Section 15(1) of the Customs Act, 1962:

Section 15(1) specifies that the rate of duty applicable to imported goods is determined on the date the bill of entry is presented, the date goods are removed from a warehouse, or the date of payment of duty, depending on the circumstances. The proviso states that if a bill of entry is presented before the date of entry inwards of the vessel, it shall be deemed to have been presented on the date of such entry inwards. In this case, the relevant date for duty computation was determined to be 15-9-1977, the date of entry inwards.

3. Interpretation of the term 'import' under Section 2(23) of the Customs Act, 1962:

The term 'import' is defined as 'bringing into India from a place outside India,' and 'India' includes its territorial waters. The petitioners argued that the duty should be based on the date the goods entered the territorial waters. However, mere arrival within territorial waters does not authorize unloading or determine the duty rate; the entry inwards is crucial.

4. Relevance of the Supreme Court decision in M/s. Prakash Cotton Mills Pvt. Ltd. v. B. Sen & others:

The Supreme Court's decision in Prakash Cotton Mills established that the rate of duty is determined by the date of removal from the warehouse, not the date of importation. This principle was applied to the current case, reinforcing that the date of entry inwards (15-9-1977) was relevant for duty computation.

5. Applicability of the exemption Notification No. 227-Cus., dated 2-8-1976:

The petitioners claimed that the duty should be based on the exemption notification in force on 21-8-1977. However, since the entry inwards was granted on 15-9-1977, after the notification increasing the duty rate came into effect, the higher rate applied.

6. Interpretation of the Division Bench judgment in M/s. Sylvania & Laxman v. M.M. Singh Shoure:

The petitioners relied on the Division Bench judgment, which held that goods chargeable at an exempted rate on the date of importation should not be subjected to a different rate if the exemption is withdrawn later. However, this judgment was distinguished based on the facts that the goods in the current case were chargeable to duty on the date of importation, and the relevant date for duty computation was the date of entry inwards.

Conclusion:

The Government concluded that the petitioners' interpretation would render Section 15(1) redundant, which is against the principle of harmonious construction. The Appellate Order was upheld, and the revision application was rejected, affirming that the duty rate applicable was based on the date of entry inwards (15-9-1977).

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