1983 (10) TMI 250 - AT - Customs

Issues Involved:
1. Determination of the relevant date for assessing customs duty.
2. Applicability of exemption notification.
3. Procedural compliance by customs authorities and ship's master.
4. Principles of natural justice in the appellate proceedings.

Detailed Analysis:

1. Determination of the Relevant Date for Assessing Customs Duty:
The core issue was whether the customs duty should be assessed based on the date the ship first entered the territorial waters of India (2-12-1978) or the date when the goods were actually off-loaded (13-2-1979). The appellants argued that the import was complete when the ship entered the territorial waters on 2-12-1978, citing Section 2(23) and Section 2(27) of the Customs Act, 1962, which define "import" and "India" respectively. They contended that the taxable event took place on this date, and therefore, the exemption notification in force at that time should apply. However, the lower authorities, including the Appellate Collector, held that the relevant date for determining the rate of duty was the date of filing the Import General Manifest (IGM) as per Section 15 of the Act. The Tribunal upheld this view, referencing several judicial authorities, including the Delhi High Court in Jain Shudh Vanaspati Ltd. v. Union of India, which held that the rate of duty is determined when the goods are cleared for home consumption and cross the customs barrier, not merely when the ship enters territorial waters.

2. Applicability of Exemption Notification:
The appellants contended that since the goods entered the territorial waters on 2-12-1978, when the exemption notification (Notification No. 4, dated 2-8-1976, as amended by Notification No. 66, dated 18-3-1978) was in force, they should be exempt from duty. The lower authorities rejected this, stating that the exemption notification had expired on 31-12-1978, and the relevant date for duty assessment was after the new notification (dated 5-1-1979) had come into force. The Tribunal agreed, emphasizing that the goods were not off-loaded until 13-2-1979, by which time the exemption had been withdrawn.

3. Procedural Compliance by Customs Authorities and Ship's Master:
The appellants argued that the customs authorities failed to enforce procedural compliance, such as filing the import manifest when the ship first entered territorial waters. They claimed this lapse should not penalize them. However, the Tribunal found that the ship had indeed left Indian waters and returned later, as evidenced by the appellants' own admission and documents from the Steamer Agents. The Tribunal noted that the procedural lapses did not alter the fundamental issue of the relevant date for duty assessment.

4. Principles of Natural Justice in the Appellate Proceedings:
The appellants alleged that the Appellate Collector introduced facts not within their knowledge and denied them inspection of records, violating principles of natural justice. The Tribunal acknowledged that the Appellate Collector's references to the import manifest and other procedural details were unnecessary but concluded that these did not affect the core finding regarding the relevant date for duty assessment. The Tribunal found no substantial injustice that would warrant setting aside the order.

Conclusion:
The Tribunal dismissed the appeal, affirming the lower authorities' decision that the relevant date for assessing customs duty was when the goods were off-loaded (13-2-1979) and not when the ship first entered territorial waters (2-12-1978). The appellants were granted a minor relief regarding the rate of countervailing duty, as directed by the Appellate Collector.

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